Dive Brief:
- Competitive retailer FirstEnergy Solutions said 220,000 of its northern Illinois customers will see a June surcharge of $5 to $15 to pay for the extreme spikes in wholesale power costs during January's polar vortex, when the PJM Interconnection lifted price caps as supply tightened.
- Not all suppliers are passing the high costs on to customers, but FirstEnergy said "we thought it was necessary [...] where contracts allow."
- The surcharge illustrates how "fixed-rate" contracts, like those FirstEnergy Solutions has with numerous Illinois municipalities, can sometimes include the possibility of such extra charges.
Dive Insight:
The extreme cold in January was a shot in the arm for power generators who collected exceptional prices for their output. But it also created costs that put a few retail suppliers out of business, and put some in the position of determining whether they could pass the costs along to customers. Constellation and Integrys Energy Services said they do not plan to pass on the costs. But FirstEnergy said where its contracts allow it to do so, it will. Municipalities with those contracts may want to read the fine print.