Electrical shock | Arkansas Blog

Saturday, August 19, 2006

Electrical shock

Posted By on Sat, Aug 19, 2006 at 10:45 AM

Look out, North Little Rock, the worst apparently is yet to come.

The Democrat-Gazette's front-page story on poor Prescott residents swallowing $600-a-month electricity bills as the result of their city's decision to stick with its city-owned power company bodes ill for NLR residents, whose city also owns and operates its electric company.

Even though NLR powers-that-be have begun warning of gigantic bills looming for residents, it's probably safe to say nobody imagined it might turn out as badly as it has in Prescott.

Excerpting from the Democrat-Gazette's piece:

Several other city-run utilities throughout Arkansas, including the North Little Rock Electric Department, are experiencing “sticker stock” as longterm wholesale power contracts begin to expire, [Entergy spokesman Mike Mauldin] said.
Next year, North Little Rock will see power costs jump from $37.95 per megawatt hour to an average of $79.77 per megawatt hour.
Much of that increase is attributable to merchant power providers — in this case, Maryland-based Constellation Energy — relying on high-cost natural gas to produce electricity, he said.

As a retail provider, Entergy can offer cheaper power because it relies on cheaper coal, nuclear and hydroelectric power along with its natural-gas plants.

As long as natural-gas prices remain high, he said, so will much of the nation’s merchant-produced electricity.
“City-run utilities need to understand that the wholesale market is never going to be the same as it once was,” Mauldin said.

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