Trenton’s Utility Committee heard details Tuesday evening on the preliminary financial impact for TMU regarding substantially-increased prices for natural gas and the electric market due to the prolonged extreme cold weather last month.
Trenton Municipal Utility Comptroller Rosetta Marsh says having a large reserve in the electric department will help Trenton withstand the higher costs and not have to rely on passing on additional costs to customers. But Trenton this month, for the usage of last month, will pay $90,000 more than usual to the Missouri Public Utility Alliance.
Trenton is among 35 participants in the Missouri Public Energy Pool which is a cost-sharing entity of members across the state. The energy pool gets 76% of its fuel generation from coal-fired plants. Smaller amounts come from natural gas, hydro, solar, and wind facilities.
TMU officials say the normal February invoice for Trenton is about $480,000 but the invoice is almost three times as much. Total energy charges for Trenton for February is $1,214,751. The invoice requested a cash payment of 589,147. This leaves a balance that MPUA is going to hold for now to allow time for it to decide on low-interest payments.
Trenton’s remaining debt for the energy charges tops $783,325
Utility Director Ron Urton said that figure will actually be less once MPUA calculates a credit for having Trenton operate diesel generators for three of the coldest days. Urton estimates the credit on next months’ invoice could be around $200,000. He said Trenton’s local generation put 440 megawatts back in the energy system.
Trenton usually purchases power as that costs less than doing your own generation. The energy charge is for getting electricity to the Trenton sub-stations which then distributes the power to customers across town.
A local issue that came up during the TMU diesel generation was the jelling of the fuel due to extreme cold. Urton said this is being addressed in an effort to avoid a future problem. The city purchased large amounts of diesel and oil to operate the generators (which usually are on “stand by” if and when they are needed).
Information shared with the Utility Committee that during the polar vortex, the pool saw the overall price of natural gas increase from around $3 per 1 million BTU’s up to $1,000 for the same amount. And it saw electric market prices increase from a typical $20 per megawatt-hour to over $4,000 for that same megawatt-hour. The energy pool noted all costs for February, not including local transmission, is estimated to be around $182 per megawatt-hour – That’s described as three times greater than normal.
The pool will “true-up” the estimate next month when it has received all supplier invoices.
MoPep, which is the name of the pool, will take $21 million from a revolving line of credit to help spread the impact of the prices on the member utilities. Working capital and reserves will pay February supplier invoices. Yet to be decided by the pool is the length of the term. and interest rate, for members to pay back the line of credit and restoring those
reserves.
