Cleco is responding to customers who say their bills have increased by a large amount in recent months.
After receiving questions regarding the higher bills, we reached out to Cleco to find out more. One person said bills had increased by $400 or even doubled for some in their area. The company shared Wednesday morning that there are three reasons the bills could be increasing:
- Interim Storm Charge
- New Rate Schedule
- Fuel Costs
Cleco says insurance companies stopped insuring things like utility poles and wires in 1992. Hurricanes Laura, Delta, and Zeta cost Cleco more than $240 million - more than Katrina and Rita combined. Because of this, the Louisiana Public Service Commission approved an Interim Storm Restoration Charge in May 2021 to help Cleco recover some cost of equipment repairs, replacements, and system rebuilds.
Cleco was authorized by the PSC to collect $16 million annually in the first phase of interim storm recovery. The charges for Phase I were applied to all consumption billed after June 1, 2021, except for those customers billed on a calendar month basis, whose charges were applied to actual consumption after May 31, 2021.
The PSC says a safeguard was put in place "to ensure that Cleco Power ratepayers pay no more than their fair share of the storm-related costs."
Additionally, the LPSC approved a new rate plan for Cleco that was effective on July 1 for 12 months, ending June 30, 2022, in which Cleco may set rates that allow for the company to collect revenues in the amount of $624 million.
According to Cleco, the summer rate includes three tiers that are based on increased electricity usage for residential customers (tiers are below). The winter rate will be a flat rate billed November - April.
Cleco customers, and electric customers in general, are billed by kilowatt hour, abbreviated as kWh. It's a unit of measurement for electric power, similar to a gallon would be used to measure water usage.
- Customers using less than or equal to 1,000 kWh are charged $0.06977/kWh
- Customers using 1,001-1,500 kWh are charged $0.08372/kWh
- Customers using greater than or equal to 1,501 kWh are charged $0.10047/kWh
Finally, Cleco says fuel costs can increase customers' bills as well. Multiple fuels are used to generate power, and fuel costs are passed to customers at cost, meaning Cleco doesn't profit from fuel costs. The February ice storms caused a spike in fuel costs and customer demand.
Natural gas, which is used at almost all of Cleco's generating facilities, prices are rising, and the cost of coal increased. Both have impacted customer bills.
All these factors are based on customer usage, Cleco says.
The post on Cleco's Facebook explaining the impacts has nearly 530 comments and more than 300 shares, most from people stating they've seen some of the highest increases ever over the past month.
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