Village Electric rates reflect extended deep freeze
The recent extended near zero temperatures are showing up in increased costs of obtaining electric power for Village of Akron Electric customers. Akron Village Board members discussed a memorandum from the New York Municipal Power Agency (MEUA), of which Akron is a member system, outlining the impact.
The Village of Akron sets electric rates to cover the operation of the local distribution system. The cost of generating the electricity distributed to customers and transporting it to the system is primarily recovered through the monthly purchase power adjustment (PPA) that is calculated each month and billed as a pass through to customers.
The base load of hydro power supplied by the New York Power Authority comprises only part of the monthly PPA charge. The PPA includes a number of charges incurred by the system. “The components primarily driving the higher bills this winter are energy prices and transportation costs (transportation charges tend to rise commensurately with higher energy prices and higher loads),” Jim Stokes, Executive Director/General Manager of MEUA notes.
Stokes’ memorandum to the Village of Akron and other MEUA and NYMPA Member systems reminded them that as a distribution system, they have no control over energy prices or transportation costs.
“Energy prices are determined in a regulated market operated by the New York Independent System Operator (NYISO). Prices are determined based upon supply and demand. During cold weather conditions, demand rises significantly. NYMPA’s forward hedging practices in effect allow us to purchase fixed quantities of electricity at pre-determined prices below current market prices thus dampening the impacts of seasonally high market prices for NYMPA customers. But to varying degrees, both NYMPA and NYPA must purchase additional quantities of supplemental energy at current market prices. Unfortunately, there are not enough low-cost generating units in New York State to allow supply to rise equally with demand, and therefore, energy prices can and are rising exponentially under these conditions,” Stokes states.
In late January, NYISO posted the following notification:
“New York is experiencing a prolonged severe cold weather event, In many parts of the NYISO Balancing Authority Area, temperatures for January 27, 2026 through at least February 1, 2026 are forecasted to remain well below average. This prolonged severe cold weather event is expected to result in a continued sustained high level of demand for electricity. While the vast majority of generating units in the NYISO region continue to function adequately at the time of the posting, given the forecasted long-duration extreme cold weather event, NYISO foresees the need to maximize the availability of all the generating resources in New York, ie., all generating resources that are part of the generation resource mix.”
Stokes indicated that as of January 28 there was no reason to believe there will be any interruption of electricity supply, stating that the NYISO statement showed recognition that under the current prolonged cold weather conditions, the production from all available generating sources needs to be optimized to keep up with demand and ensure system reliability.
A constrained supply in the face of increased demand leads to higher supplemental energy prices. To put that in perspective, Stokes said, “around the clock energy prices for the rest of this week are averaging nearly $600 per megawatt hour ($0.60 per kilowatt hour). For the month of January 2025 (which was a fairly cold month relative to average) prices averaged $103 per megawatt hour ($0.103 per kilowatt hour). In January of 2014, the infamous polar vortex year, prices averaged $127 per megawatt hour (0.127 per kilowatt hour) in 2014 dollars.”
The Village of Akron has posted the entire memorandum on their website.