July 13, 2022

WPCA Frequently Asked Questions

This article was originally posted on July 13, 2022. For more information on how to read your electric bill, please visit https://midsouthelectric.com/understanding-your-electric-bill/.

What is WPCA?

The Wholesale Power Cost Adjustment, identified as a monthly line item on your MidSouth bill, reflects the cost of fuel needed to produce electricity in Texas.

Who controls the power market in Texas?

The Texas Public Utility Commission (PUCT) and the Electric Reliability Council of Texas (ERCOT) collectively manage the state’s power market. The PUCT is the regulating authority and ERCOT ensures there is enough power being generated to meet the demand of Texan consumers.

Why did the WPCA rise?

The WPCA fluctuates as the price of natural gas changes. Recently, natural gas prices in the state of Texas and across the nation increased.

Why is the cost of natural gas so high and is that the only reason the WPCA went up?

There are several factors currently influencing natural gas prices and the WPCA:

  1. The Texas Power Market began operating much more conservatively after the electricity shortage during Winter Storm Uri. ERCOT now holds more electricity in reserve to aid during times of disaster. Holding onto this extra power has a cost associated with it. However, the hope is it will be more stable for all of us in the future.
  2. European countries are currently banning the importation of natural gas from Russia, due to its invasion of Ukraine. As the largest natural gas-producing state in the U.S., Texas has been exporting natural gas to other countries at a higher price than what it would sell for here. This contributes to the decreased supply while in high demand.
  3. Due to Federal Regulations, drilling for natural gas has slowed down. While unable to harvest more natural gas, the shortage drives the price higher.

Is MidSouth the only electric utility that is being affected?

No, electric utilities across the state of Texas are experiencing this rate increase. Even with the current increase of the WPCA, Texas’ electric rates are still comparable to the national average.

Why did it feel like this happened overnight?

Over the past several months, out of concern for our members, MidSouth absorbed increased fuel charges, based on market projections indicating natural gas prices would fall before the start of summer. In June, as the price of natural gas continued to rise, MidSouth determined it could not afford to absorb these costs any longer. MidSouth received its power for the most recent billing cycle and could no longer absorb the increased WPCA charges for the membership.

How long will this last?

The current Wholesale Power Cost Adjustment charge is not permanent. Because the charge fluctuates, as we continue to see changes in the power market, we will also see adjustments to the WPCA.

How is MidSouth helping members during this time?

MidSouth offers several rewards to its members, including rebates for home improvements to enhance energy efficiency. The rewards list can be located on our website at midsouthelectric.com/midsouthrewards. Members can also take advantage of an online or in-person home energy audit. For more information, please visit midsouthelectric.com.

What can I do to help lower my electricity bill?

Changing your habits is the easiest way to lower your electric usage. Simple changes like raising your thermostat temperature setting to a comfortable level, using fans to circulate air, closing blinds, and unplugging electronics when not in use help conserve electricity. You may find other energy-saving tips and information on our website at midsouthelectric.com/residentialservices/energy-management.

What if I need financial assistance?

We encourage members needing financial assistance to visit our website at midsouthelectric.com/financial-assistance-notice for a list of local, community-based organizations that help individuals facing financial difficulty with their electric bills.

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