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Two area congressman have joined together to ask the Federal Energy Regulatory Commission to look into what caused the town of Bedford’s energy costs to jump by $500,000 in January.
In a letter to the FERC, Sixth District Congressman Bob Goodlatte and Fifth District Congressman Robert Hurt stated the town had raised concerns about the energy prices climbing in January because of congestion fees related to the transmission costs the town incurred. Typically the town would pay $60,000 a month for that but in January the cost was $560,000.
“We appreciate the town of Bedford bringing this issue and its impacts on the community to our attention,” stated Congressman Hurt this week. “Rep. Goodlatte and I are committed to ensuring that Bedford’s concerns are quickly and accurately addressed by the regulatory authorities, and we have sent a letter to the Federal Energy Regulatory Commission requesting a timely response and consideration of our concerns.”
The letter to FERC stated that a prompt response was needed, “given the significant dollar amount of the increase and the challenges to both the local government and area residents in accurately budgeting for the increase.”
In a letter from the town on the subject, Bedford Mayor Robert Wandrei stated that the town is concerned about the effect the winter weather operations in the PJM transmission line region had on the town’s electric costs.
“The unprecedented energy, transmission, congestion and ancillary service prices were not reflective of smoothly operating market forces,” Mayor Wandrei’s letter stated. “Rather they seemed arbitrary and excessive without contributing any long term operating benefit to the system.”
Wandrei stated that the nature of the charges will cause “a severe burden on our residential and commercial customers.”
That burden will include a 1 percent rate increase to customers in their electric rates for the next three years to cover the cost of that one month’s jump in energy costs. In addition, the town has proposed a 2 percent overall increase in electric rates to its customers.
“There will be negative economic impacts felt throughout this region as the impact hits other utilities as well,” Wandrei stated. “The uncertain nature of these wildly fluctuating costs also makes it almost impossible to budget utility costs and charges with any level of accuracy. Utilities, businesses and residents are being unfairly impacted.”
Wandrei asked for FERC to investigate the causes “of the excessive charges in order to gauge their fairness and whether they are justified.”
“We also want to be assured these charges were not the result of any market manipulations to benefit any groups or investors,” Wandrei stated. “We would also urge the Commission to seek out solutions to prevent future situations like this from impacting this region again.”
Fees to transmit electricity from its supplier to the town shot up dramatically in January during the extreme cold stretch. While the cost of the electricity itself didn’t change—Bedford has a contract for those charges—the transmission fees went up $500,000.
During a council meeting last month, Bedford Town Council discussed the fees and the need to make sure price-gouging wasn’t involved in the increased costs. Bedford receives its electricity through the PJM transmission services.
Overall the town’s electric department bill for January was $2.24 million, well over the normal $1.7 million cost. The town will take a loan to pay off its bill and then spread those costs to the consumer over the next three years.