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Hutchinson utility staff warn higher wholesale power, transmission costs will drive summer power-cost adjustments
Summary
Utility staff told the Hutchinson Utilities Commission that underestimated transmission charges and rising wholesale prices pushed May to a $238,955 loss and that power-cost adjustments for June–August will likely increase, while gas operations and reserves are being managed to blunt the effect.
Jeremy, a utility staff member, told the Hutchinson Utilities Commission that higher wholesale power and transmission charges have already produced a substantial May loss and that the utility is likely to see larger power-cost adjustments in the summer months. “There actually is an additional just under $32,000 that should be charged to that transmission line item for May of 2026,” he said, adding that after the adjustment the month’s loss will be $238,955.
The presenter said the forecasted peak for May was 42.9 megawatts but actual peak approached 50 MW because of warm weather, which increased congestion and transmission costs. He reviewed MRES wholesale figures, noting May’s wholesale cost was $46.57 per megawatt-hour and that wholesale prices rise sharply in June, generating a costly power-cost adjustment (PCA) that could push PCA impacts into June, July and August.
Jeremy stressed the role of reduced local generation in the outlook: unit one is out of service, limiting the city’s ability to sell into the market or use lower-cost internal generation to blunt wholesale prices, which will weigh on resale volumes and revenues. “We almost hit 4 million in sales last year…with unit one out, we’re certainly not going to hit that,” he said.
On the gas side, Jeremy said operations are performing better year-to-date and noted the utility has a rate stabilization fund of just over $384,000 with a goal of returning it to about $600,000 over the coming months to provide winter protection. He also told commissioners that staff had approved approximately $700,000 in contractor payments and that roughly $9 million in investments were maturing this month, which supports near-term liquidity even as some months could show negative operating cash flow due to capital work.
After the presentation Commissioner Matt moved and Commissioner Kathy seconded approval of the financial statements; the commission voted to approve the statements. The commission recorded Matt’s earlier conflict of interest and abstention on the payables vote.
The utility staff will continue to monitor wholesale and transmission charges and report updated PCA impacts after the June–August period closes.
