We have been notified by our wholesale power provider, Arkansas Electric Cooperative Corporation (AECC), to expect higher prices this summer due to increased costs in fuel used to generate electricity. Natural gas prices were almost three times higher in April 2022 than in April 2021, and more than four times higher than in April 2020. We anticipate them to remain high through the remainder of 2022.

As a not-for-profit, member-owned cooperative, we must pass this increased energy cost to our members. If the amount Ozarks Electric pays to its wholesale provider differs from what is built into the base electric rates, the difference is applied to the Fuel Cost Adjustment item on your bill, as either a charge or credit. The adjustment factor is multiplied by the kilowatt-hours used in the current month. The fuel cost adjustment is a direct pass-through from AECC to Ozarks Electric to our members for increased costs —there is no markup over what Ozarks Electric pays for fuel used for energy generation.

You can expect to see the increased cost for energy reflected in the fuel cost adjustment on future bills. While we cannot prevent the increased fuel cost, we want to do everything possible to communicate and assist our members.


What is a fuel cost adjustment?

If the amount paid by Ozarks Electric to its wholesale electric supplier for the energy purchased differs from what is built into the base electric rates, then this fuel cost adjustment is applied to each member's bill. This adjustment factor — charge or credit — is multiplied by kilowatt-hours used in the current month. The fuel cost adder is a direct pass-through for increased costs. There is no markup over what Ozarks Electric must pay for fuel used for power generation.

Why is it going up now?

Due to supply-chain issues and labor shortages with railroads that supply some generation facilities, AECC has had to rely more on natural gas as a fuel source for generating electricity, just as the market price for natural gas has sharply risen. U.S. natural gas prices were as high as $7.48/MMBtu in mid-April. Natural gas prices averaged $2.66/MMBtu in April 2021 and were $1.74/MMBtu in April 2020.

When will the fuel cost adjustment go down?

Natural gas prices are anticipated to remain high for the rest of 2022. AECC anticipates some relief in fuel costs as supply chain issues are resolved and additional generation facilities are brought back online, but the fuel price will likely remain above average for at least the next several months.

What can I do?

The most effective way to lessen the impact of increased energy costs is to reduce your energy usage:

  • During warm months, keep your thermostat on the warmest comfortable setting.
  • Have your air conditioner serviced to maintain its efficiency and change your filters frequently.
  • Close shades and curtains during the day and use LED bulbs for lighting.
  • Seal around your doors and windows and make sure your attic is adequately insulated.

In addition to conserving energy to reduce overall costs, you may find switching from traditional billing to levelized or prepaid billing helps make the increased fuel costs easier to manage. We also offer payment arrangements for members who are unable to pay a bill on their regular due date. Please login to your MyOzarks account to manage your energy usage or contact us to learn more about energy efficiency programs available to our members.

Should I install solar panels to cut my bill?

Residential solar panels can be a good solution for some of our members to offset their energy costs. However, they are a long-term investment, and many solar companies provide overly optimistic projections of how long a solar installation will take to pay for itself. Energy efficiency measures such as adding insulation, sealing air leaks and installing a smart thermostat are often more cost-effective ways to reduce your bill. If you are considering solar, we encourage you to contact us first to review your usage history and discuss the best solutions for your situation.