Tommy Mann Jr.
The Orange Leader
This January, Entergy Texas’ homeowners will pay an average of $84.83 for electricity. That’s 34 percent less than January 2012 when the average bill was $114.14.
The lower bills will continue through March thanks to a three-month fuel refund that will lower the average 1,000 kilowatt-hour residential bill by $26.68 each month. In January, customer bills will also reflect the last month of a three-month series of production cost credits with the January credit coming in at $10.63.
The fuel refund reflects lower than anticipated costs for the fuel used to generate electricity. Regulations in Texas require Entergy Texas to set a fixed fuel factor that stays on bills for six months at a time. The factor is based on market costs for fuel at a certain point in time and determines the fuel charge that customers see on bills. The company makes no profit on fuel. Prices for fuel, however, change frequently.
If the fuel factor proves to have been set too high, customers will receive a refund on their bills. The refund customers will receive through March reflects an over-recovery from January through October 2012.
Both the fuel refund and the last month of the production cost credits reflect changes in the cost to make electricity for customers.
The production cost credits are a result of the agreement Entergy Texas has with the other companies in the Entergy Corporation system of electric distribution companies. This includes utilities in Arkansas, Louisiana and Mississippi. The agreement calls for the cost of producing electricity to be “roughly equal” among the companies. That means if it costs more to produce power in one company than in another, the Entergy company or companies with the lower cost must make payments to customers in the higher-cost companies.
Entergy Texas provides electricity to more than 400,000 customers in 27 counties. It is a subsidiary of Entergy Corporation.