Owensboro Municipal Utilities customers will see an increase in their electric bills beginning in October, with officials saying the average residential customer is expected to pay about $8.50 more per month.
The OMU Utility Commission approved the change this week, which adjusts the Energy Cost Adjustment (ECA) — a rider on monthly bills that helps stabilize rates against the volatility of the power market.
Sonya Dixon, public relations and communications manager, said the increase is largely tied to higher power supply costs as the utility transitions to a new energy contract.
“Power supply is about 75% of our annual budget for the electric side of things, so that tells you how significant it is,” Dixon said. “We don’t want to build volatility into a standard rate. This rider helps protect our customers from those large swings in the market.”
The increase was anticipated earlier this summer when OMU announced plans to move away from relying solely on the Elmer Smith Station and signed new contracts with NextEra Energy Marketing and Big Rivers Electric Corp. As previously reported by Owensboro Times here, the transition is designed to diversify OMU’s energy portfolio and reduce long-term risks associated with market fluctuations.
Dixon noted that even with the adjustment, OMU’s rates remain in the middle compared to similar utilities in the region, and overall bills have been stable or lower since 2019.
“The last thing that we ever want to do is increase rates,” Dixon said. “But as a public entity, we are strictly a pass-through, so we’re only charging what it costs to get that service to you. There are no shareholders and no profit-making arm.”
She added that OMU maintains reserve funds, but much of that money is either restricted or held as operational and contingency reserves required to ensure the utility’s financial health and bonding ability.
The increase will take effect with the October billing cycle.
