BPU Lowers ERC Electric Rate

True-up of projected fuel & purchase power costs will result in a slight decrease in bills based on customers’ usage

(KANSAS CITY, Ks)—The Kansas City Board of Public Utilities (BPU) has announced that the fuel and energy recovery charge for the First and Second Quarters of 2021 is being adjusted.

The 1^st quarter ERC rate was lowered to 2.6 cents per kWh which was lower than the 2020 average rate which was 3.2 cents per kWh. The 2^nd quarter ERC rate has been lowered to 1.6 cents per kWh which is 50 percent less than the 2020 average rate.

This lowering of the ERC rate is equivalent to a refund totaling $16 million dollars which is a result of over collection of the ERC in the 3^rd and 4^th quarters of 2020 and the 1^st quarter of 2021.

In 2020 many commercial and industrial businesses either shut down or reduced the amount of electricity they used due to the COVID-19 pandemic. In the 1^st quarter of 2021, BPU produced more energy into the marketplace than its customers used and this resulted in a positive outcome for the utility.

This charge, approved by the BPU Board in 2002, known as the Energy Rate Component, or ERC, represents the utility’s cost of fuel used to generate electricity and the cost of power that must be purchased on the open market.

These adjustments to the ERC are being made by the BPU on customers’ bills under the heading ERC.

The 2020 overcollection of $11 million will be paid back over the entire year of 2021 and the 2021 1^st quarter overcollection of $5 million will be paid back over the 2^nd quarter of 2021.

The ERC changes every three months and is based on the actual fuel and purchased power costs that BPU pays. These costs are then incorporated into BPU customers’ electric bills. The charge is listed as a rider on a customer’s bill, separate from electric base rates.

As a part of the total electric bill, the ERC is the most variable portion of the bill and often goes up and down with the price of energy and purchase power. The 1^st Quarter (current) ERC rate is 2.6 cents per kWh and the 2^nd Quarter ERC rate will be 1.6 cents per kWh.

About BPU

BPU’s water department was originally created in 1909, and its electric utility was operational in 1912. The purpose of the utility, then and to this day, is to provide the highest quality electric and water services at the lowest possible cost. Today the publicly owned utility serves approximately 63,000 electric and 53,000 water customers, primarily in Wyandotte County, Kansas. The mission of the utility and its employees is “to focus on the needs of our customers, to improve the quality of life in our community while promoting safe, reliable and sustainable utilities.” BPU’s Web site is www.bpu.com.