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April 27, 2014

Duncan Power rates may mimic PSO increase

DUNCAN — Public Service Company of Oklahoma (PSO) will increase its rates and customers of Duncan’s city-owned power utility could see a similar increase.

PSO’s increase is due primarily to rising natural gas prices that were spurred by this winter’s high customer demand for both natural gas and electricity, the company said.

Extremely low temperatures caused an increase in demand for electricity that resulted in a spike in the price PSO pays for fuel.   

For a residential customer using 1,000 kilowatt-hours per month, the increase will be $5.68, which is about 6 percent, the company said.

The Duncan Public Utilities Authority traditionally mirrors the charges that PSO uses, according to City Manager Jim Frieda.

Frieda said Thursday a represenative from the Oklahoma Municipal Power Authority is scheduled to address the City Council on May 13 to explain an 8 percent rate increase it will pass on to city-owned utilities like Duncan’s.

“They could go up and they may not go up,” the city manager said of rates charged by Duncan Power.

“Our goal is to stay competitive” with PSO, he said.

Duncan Power has not been able to get cheaper hydropower from the OMPA for two years now because of the ongoing drought, according to Frieda.

“PSO understands that higher natural gas prices adversely impact customers in many ways, including their electric bill, which is why we’re extending the recovery period to reduce the impact on customers,” said Bobby Mouser, PSO director of Customer Services and Marketing.

PSO is adjusting the fuel factors to recoup $27 million in under-recovered fuel expenses over a 12 month period.  PSO will evaluate the need for an additional adjustment in November.

PSO incurs fuel costs on behalf of customers and then recovers those costs after the fact.  It is simply a pass-through of costs and PSO does not earn a return on or benefit from fuel purchases.

PSO’s last fuel cost adjustment was in November 2013.

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