Electric and natural gas utilities adjust for the cost of the coal and natural gas to power their power plants every three months in what's called a fuel adjustment charge.
Sometimes that means more money on your bill — sometimes less. Usually it's only the difference of a few dollars.
But the war in Ukraine and the pandemic have dramatically driven up fuel costs. The highest recent fuel adjustment was by AES Indiana — where the average customer paid an extra $24 a month from September to November.
CenterPoint and NIPSCO have asked to temporarily raise the average customers’ bill by about $13 and $6 respectively to pay for fuel costs. Unexpected outages at coal plants at those utilities could also play a role in those fuel charges.
A unit at CenterPoint Energy’s F.B. Culley coal plant has been shut down since June due to an issue with its boiler feed pump turbine. It's not clear when it will be back online.
NIPSCO has also had unexpected outages at its coal plants recently and a planned outage at its Sugar Creek natural gas plant. These outages have forced both utilities to buy power from the wholesale market.
Ben Inskeep, program director for the Citizens Action Coalition, said customers shouldn’t have to pay for broken plants.
“A lot of folks have been saying for a long time, ‘We need to have these fossil fuel plants in order to have reliable electricity’. And then lo and behold, when we're actually needing those plants to operate to generate electricity, they haven't shown up," he said.
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But Nick Meyer, vice president of state communications for NiSource — NIPSCO’s parent company — said those outages aren’t what’s behind the majority of that proposed increase.
“The predominant driver that we're seeing really is, you know, the coal, the natural gas that we have to purchase to create and generate electricity," he said.
Meyer said the outages NIPSCO experienced were also not particularly long or unusual. He said these constantly changing fuel prices are one of the reasons why NIPSCO is moving to more renewable energy sources like wind and solar — which don’t require fuel.
In a statement, CenterPoint Energy officials said the utility has used credits from selling energy on the marketplace to reduce the cost to its customers from the outages.
Indiana Michigan Power is the only investor-owned electric utility that hasn’t raised rates through a fuel adjustment since Russia invaded Ukraine. Inskeep said it mostly gets its power from the D.C. Cook nuclear plant in Michigan.
Contact reporter Rebecca Thiele at rthiele@iu.edu or follow her on Twitter at @beckythiele.
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