Huge electric bill hits Scribner due to frigid February
SCRIBNER, Neb. (WOWT) - A frigid February had everyone worried about utility costs but wait until you see the shocking electric bill for Scribner.
Scribner buys power from a broker who sent the city administrator February’s bill. Expecting a little more than the usual $20,000 charge bill, Mayor Ken Thomas is handed a one-month electric bill of $510,000.
“Obviously we’re shocked, couldn’t believe it,” said Thomas.
The electric bill comes from the Municipal Energy Agency of Nebraska, a non-profit wholesale power supplier.
“Call us on the phone and say look the market is crazy, it’s out of control, it would be in your best interest to run your generators until we tell you to shut them off. But we didn’t get that call,” said Thomas.
Daycare Owner Grace Botterbrodt is among about 500 customers Scribner charges for electricity and she worries about paying her share of the city’s February bill.
“Our percentage could be as high as $4,500. I don’t have that kind of money. I don’t know anybody who has that laying around to pay an electric bill,” said Botterbrodt.
Customers shouldn’t expect a jaw-dropping bill yet, the city borrowed nearly half a million dollars from the town bank to cover the February bill if a dispute fails.
“We’ll have to start paying this loan off and it will come in the form of a rate increase but we’re going to try to make it manageable for people,” said Thomas.
Scribner produced its own electricity during the rolling blackouts but turned off generators when the power grid came back to full strength. The mayor says if the city had been notified about the extreme change in electrical cost, they could have turned down their two generators.
That would have added about $25,000 not $510,000 to their electrical bill. The atmosphere at Monday’s city council meeting was electric when a manager of the power supplier answered questions.
Grace will save just in case she has to pay a huge electric bill, even if it’s spread over many months.
“I’ll be stressed for many months over whether I have thousands of dollars to come up with to pay an electric bill,” said Botterbrodt.
The mayor says money from the town’s bank loan will be held in escrow until a billing dispute is settled.
Municipal Energy Agency of Nebraska sent a statement to 6 News with more background information and their response on the power bill.
Background and Scribner’s affiliation with the Municipal Energy Agency of Nebraska:
The Municipal Energy Agency of Nebraska is a not-for-profit wholesale electric supplier and service provider to more than 60 smaller municipalities in Nebraska, Iowa, Wyoming, and Colorado. MEAN was formed in 1981 and is governed by its member-owners which each have a representative on the Board.
MEAN has 62 full-requirements participants to which it supplies all their energy and has a diverse portfolio of resources to serve their needs. These full-requirement participants pay an established rate for their energy. The City of Scribner is a service participant of MEAN. MEAN does not supply energy to the City as they buy their energy from the market to serve their electric load. MEAN assists them with those market purchases, which is a pass-through cost.
The Unprecedented Extreme Weather Event:
The weather event that happened the week of February 14 in the Southwest Power Pool (SPP) regional electric grid was truly unprecedented in SPP’s 80+ year history. Extremely cold temperatures impacted nearly 100% of SPP’s 14-state region, causing soaring demand for electricity. Simultaneously, supply was being curtailed due to decreased supply of natural gas, weatherization challenges at power plants that led to generation outages, loss of electricity imports to SPP from neighboring regions, and wind forecast uncertainty, all of which led to extreme electric price volatility.
In a market-based arrangement like Scribner’s, how their generating units are handled in the day-ahead or real-time market is complex, as they are not registered in the market, and decisions by local personnel would have to be made in an environment where prices change every 5 minutes. At times the real-time prices during this event were above Scribner’s cost to run their generating units and at times below; it was an extremely volatile environment. MEAN works with a third-party provider for energy dispatching services. We are working with that provider, SPP, the local transmission provider, and Scribner to evaluate the best communication strategies relative to operating these non-registered units in such an unprecedented event.
Working with the City:
We know that Scribner is understandably concerned about a very large electric bill. A representative from our staff appeared before the council last night to discuss the situation with them and there were phone calls prior to that meeting. MEAN will work with the City going forward to seek strategies and solutions – we are scheduling a workshop with City representatives to discuss options and potential risk mitigation strategies for the City’s approval.
Copyright 2021 WOWT. All rights reserved.