What is the Energy Cost line item on my electric utility bill?
The Energy Cost (EC) was designed to recover increased power supply costs that are caused by the fluctuations in the price of fuel to produce energy or purchased energy. Some utility agencies refer to it as a “fuel adjustment”. Energy is a commodity, and like every other commodity it is subject to the laws of supply and demand. When demand is high or supply is short, costs go up. The EC gives utilities the ability to deal with ongoing energy cost changes without having to make frequent changes to the base rate structure. Most electric and natural gas utilities use an energy cost adjustment to offset the fluctuating energy costs. In January 2009 the City Council approved Ordinance #1219 which restructured electric rate charges, rate classes, and added the Energy Cost (EC). The ordinance eliminated a declining block rate schedule which encouraged users to consume more energy because the more you used, the cheaper it was priced. The new rate schedule is based on the basic rate (cost of se
