Sault Ste. Marie, Michigan
Sep 30, 2003
Lee M. Baatz Assistant. V.P. – Rates
906-632-5170
Edison Sault sees increase in purchased power costs
Edison Sault Electric Company announced today that it has filed for an increase in its Power Supply Cost Recovery (PSCR) factor due to higher costs of purchased power. The increase for its customers, the first in eight years, has been filed with the Michigan Public Service Commission (MPSC), to take effect with billings issued in January 2004.
The PSCR allows Edison Sault to pass through to its customers any increases or decreases in the cost of obtaining power supply from outside sources. Beginning in January 2004, the PSCR factor is expected to be .311 cents per kilowatt-hour, or a $3.11 charge for a typical residential customer using 1,000 kWh a month. At that level, it will represent a 5.2% increase over the customer’s base bill.
Lee Baatz, Assistant Vice President of Edison Sault, attributed the increase to higher wholesale energy prices. “Natural gas prices have climbed and are much higher than they were a year ago,” said Baatz. “Edison Sault feels the impact of those higher prices as natural gas is being used by our wholesale supplier as a source for generation to meet our customers peak demands.” Edison Sault currently uses low-cost hydro generation for about 40% of the electricity it sells. The remaining 60% must be purchased from other outside (and higher cost) sources.
Following a six-year rate freeze, Edison Sault’s customers received reductions in their billings in 2002 and 2003 as a result of the PSCR. Those reductions will be ending when the new factor is implemented. “It would have been nice if the PSCR reductions could have continued,” said Baatz. “For eight years our customers have received either frozen or reduced rates. It is unfortunate, but wholesale energy costs have now gone in the other direction, ” said Baatz. “Even with the increase, Edison Sault’s electric rates will continue to be among the lowest in the State of Michigan.”
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