Changes on horizon for Pointe Coupee Electric customers

Staff Report

Residential and business customers who receive their power through Pointe Coupee Electric (PCE) may not see a spike in their bills, but changes are expected in the next several years.

A 25-year contract with CLECO that provides wholesale power to PC Electric provides both natural gas and coal-fired generation for the New Roads electrical co-op.

Of the 10 co-ops, nine currently purchase power from CLECO Cajun, and the other currently purchases from CLECO Power.

PCE serves the northern part of Iberville Parish, along with Pointe Coupee Parish and the northwestern portion of West Baton Rouge Parish.

All those contracts expire by April 2025, and all co-ops have either concluded or are under a request for a proposal seeking a new contract following the regulations of the Louisiana Public Service Commission.

The looming question for PCE hinges on what happens once that deal expires April 1, 2025, General Manager Myron Lambert said.

“As of now, the current increase in natural gas prices won’t affect our customers much,” he said.

“It’s a five- to seven-year process to negotiate a new power supply agreement, and the things we’re doing today is to identify potential providers.”

The heaviest portion of costs of PCE’s current contract is tied to coal and the cost of coal delivery, as well as a demand charge that increases every year of the contract with CLECO.

PCE fuel costs are tied to coal and not as much to natural gas as other utilities, which is the case with investor-owned power companies such as Entergy.

The higher natural gas prices stem from the Biden administration’s policies on fracking, natural gas and oil production, which have created an artificial spike.

The long-term outlook for natural gas will not be $6 in 2025, Lambert said.

“Once this spike works through the normal business cycle and conditions, prices will go down,” he said.

The spike will be higher with Entergy customers, but some of that hike stems from new generation plants built in Louisiana and Texas in the past several years.

Entergy had a 40 percent base rate increase, according to the Louisiana Public Service Commission.

PCE rates have remained stable, and the co-op recently levied a 2 percent rate decrease, the first in its recent history.

“Just to be stable is an accomplishment in this world,” Lambert said. “What’s important to us is to make sure we ‘re cost-conscious for our members while providing them the lowest cost, most reliable power to homes.”

PCE faces a challenge to assure customers after 2025 that it will keep its rates stable below where they are today, which would make the co-op more competitive.

An increase in membership has been one of the biggest accomplishments in recent years, both in terms of stability and competitive rates, particularly during the worldwide spike in natural gas prices.

“We were down to 10,100 meters, but today we’re over 10,6000, so we reversed the trend,” Lambert said.  

The PCE growth pattern has made a big leap in the northern portion of West Baton Rouge Parish, which is far enough from the traffic along Interstate 10 yet close enough to a high-performing public school system.

Chemical companies such as Dow and Shintech have ignited the growth, which has helped PCE.

How the changes in delivering power to homes coincides with growth and technological advancement remains to be seen.

Along with delivering power, PCE and other energy providers will see the growth in automated metering.

“It’s one of the bigger investments for energy providers,” Lambert said.”

Automatic meter reading collects consumption, diagnostic and status data from metering devices and transfers the data to a central data base for billing, trouble shooting and analysis.

It will save utility providers from the process of physical meter-reading, and base billing on near-real time consumption rather than estimates based on past or predicted consumption.

While Lambert said he foresees changes in natural gas production and its delivery, he does not foresee a full-scale end of natural gas use and production.

“Even if fracking with wide open, there’s still multiple LNG facilities to export natural gas,” he said. “I’m very interested to see where this takes us.

“Our goal remains to provide the lowest cost, and the safest, most reliable power,” Lambert said. “The challenge is to bring it to our members.”