Can City's MU Justify Its Fuel Factor at 2 cents per KWhr?

Apr 26, 2013

I’ve always wondered about the expense of our electric bill and how much it appears to be higher this year than the year before. I went back to the MU website and found that their rates page hasn’t changed since May 2006.

However, we all know that our bills keep going up. The reason? The “Fuel Factor” charge which is on our bill. The “Fuel Factor” is an additional charge per kilowatt hour on top of your normal rate. Right now, the Fuel Factor is 2 cents. So when the City claims their rates are around 6 cents per kilowatt hour, that doesn’t include the Fuel Factor so it’s actually 8 cents per kilowatt hour.

I’ve looked back on past bills and in 2011 our Fuel Factor was 0.85 cents (so not quite a penny). In 2012 it went up to 1.55 cents and then this year it went up to 2 cents.

I contacted the Public Service Commission about the Fuel Factor and they said they don’t have any jurisdiction over a municipality’s charges. That means there is absolutely NO oversight to the “Fuel Factor” charge. That made me realize: Bill Bach probably calculates the Fuel Factor…and we all know that Bach’s accounting skills leave much to be desired.

Taken from the City's utility website on the Electric Rates page, this is the City's description of the Fuel Factor that appears on our Electric bill.

Taken from the City’s utility website on the Electric Rates page, this is the City’s description of the Fuel Factor that appears on our Electric bill.

I went back and read the wording for the Fuel Factor and found that if the city buys or generates power for more than 3.84 cents per kilowatt hour, they are to charge a fuel factor of the overage. But if their purchased power is less than 3.84 cents then they actually are to give us a negative fuel factor. Wouldn’t that be awesome?

Earlier in the week I crafted a sunshine request for public records requesting the most recent invoices for purchased power by Municipal Utilities. Today when I received those documents, I certainly can’t see how the City can justify 2 cents.

The invoice for April from Grand River Dam Authority is the largest bill representing 22,290,000 kWh for $1,157,695.40. That comes out to 5.194 cents per kilowatt hour which would only justify a 1.354 cent Fuel Factor.

As you can see by the image at the top of this post, the City is required to calculate the “Fuel Factor” every six months. In an effort to get a better understanding of this situation, this afternoon I requested via the Sunshine Law to view the last four calculations made by the City for their “Fuel Factor” charge.

I will release those when I get them.

(Kudos to Brandon for the “Fuel Factor” image)
  1. Branden Freeland

    We moved here from Marion Illinois 3 years ago and I can tell you for an absolute fact that everything (Water/Sewer, Cable, Internet, and Electric) is higher here. For instance with the internet service; we were paying a third of what we pay here in PB and getting double the service and it was reliable. When 90% of your income depends upon your internet service being quick and reliable then that makes it a big deal. Thank you Brian for revealing as truth what most people already assumed.

    God bless you,
    Branden Freeland

  2. Denise Magruder

    My bill’s are outrageous. Keep up the great work Brian. They need to hire you in Bill’s place.

  3. Liz

    Keep them honest~ glad you are on top of it, bcz I wouldn’t know where to start!