SHREVEPORT, La. (September 27, 2022) – Southwestern Electric Power Co., an American Electric Power (Nasdaq: AEP) company, announced today an interim fuel adjustment for Arkansas customers to help recover higher-than-expected fuel costs during the summer months.
SWEPCO filed an adjustment to the Energy Cost Recovery (ECR) rate on Sept. 21 with the Arkansas Public Service Commission (APSC) that will change the fuel factor rate from $0.037 to $0.064. The new rate would go into effect the first billing cycle of October 2022 and remain through March 2023.
Lower customer base rates for the winter period beginning in October will help lessen the overall impact to customers. SWEPCO residential customers in Arkansas using 1,000 kilowatt-hours (kWh) will see a total increase of approximately $12.05 per month. For commercial, industrial, municipal and lighting rate classes, the impact of the new rates varies by rate class and usage characteristics.
The ECR is typically set annually in the spring based on a 12-month market forecast for the cost to purchase fuel to generate electricity. SWEPCO can request adjustments throughout the year if the cost of fuel is significantly higher or lower than the annual rate set for customers.
The cost of natural gas, a key driver impacting customers’ bills based on normal usage, has been two- to three-times higher compared to last summer. The cost to purchase fuel is a direct pass-through to Arkansas customers with no profit to the company.
“While we cannot prevent increases in fuel costs, we are continuing our commitment to adding renewable energy to help reduce our reliance on purchasing fuel to generate electricity,” said Malcolm Smoak, SWEPCO president and Chief Operating Officer. “As we increase our generation mix to include more wind and solar energy, we can help offset the cost to purchase fuel and ultimately provide savings to our customers.”
Natural gas accounts for 39% of SWEPCO’s generation mix, with coal/lignite making up 40% and wind making up the remaining 21%. SWEPCO’s long-term strategy calls for more than one-third of its accredited capacity to be satisfied with wind and solar resources.
In March, the final and largest wind facility of the North Central Energy Facilities (NCEF) began operation in Oklahoma. NCEF provides 268 megawatts (MW) to Arkansas SWEPCO customers.
SWEPCO also announced plans earlier this year to add 1,071 MW of wind and solar energy through the combination of owned assets and a purchased power agreement. These projects, subject to regulatory approvals, are planned to begin commercial operation by 2025.
About Southwestern Electric Power Co. (SWEPCO)
SWEPCO, an American Electric Power (Nasdaq: AEP) company, serves more than 543,000 customers in Northwest and Central Louisiana, Northeast Texas and the Texas Panhandle, and Western Arkansas. SWEPCO’s headquarters are in Shreveport, La. News releases and other information about SWEPCO can be found at SWEPCO.com. Connect with us at Facebook.com/SWEPCO, Twitter.com/SWEPCOnews, Instagram.com/swepco, Youtube.com/SWEPCOtv and LinkedIn.com/company/swepco.
About American Electric Power (AEP)
American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP’s approximately 16,700 employees operate and maintain the nation’s largest electricity transmission system and more than 224,000 miles of distribution lines to safely deliver reliable and affordable power to 5.5 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 31,000 megawatts of diverse generating capacity, including more than 5,900 megawatts of renewable energy. The company’s plans include growing its renewable generation portfolio to approximately 50% of total capacity by 2030. AEP is on track to achieve an 80% reduction in carbon dioxide emissions from 2000 levels by 2030 and has committed to achieve net zero by 2050. AEP is recognized consistently for its focus on sustainability, community engagement, and diversity, equity and inclusion. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. For more information, visit aep.com.
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