Thurmont Residents & Electric Service Customers,
As you are aware, much of the United States experienced the most severe and longest sustained cold period since the 1990’s. Over the past 30 years, extreme winter weather electricity demand has only occurred over very brief stints of cold weather which would cause significantly elevated energy prices that lasted at most for two or three day periods.
As a reminder, approximately 50% of the electricity generated in the United States comes from generators that run on Natural Gas; therefore, the price of Natural Gas effectively determines the market price for electricity. Normally, the Natural Gas price is around $4.00 /MMBtu (Million British Thermal Units) which results in an average energy price of $40.00 /MWh (Mega-Watt Hour) under normal weather conditions.
The cost of Natural Gas during this cold period temporarily spiked up 750% reaching $30.00 /MMBtu which caused the energy prices to also increase by 750%, averaging $300.00 /MWh during much of this cold stretch. For context, the price of Natural Gas has only ever exceeded $15.00 /MMBtu two times in all of the past 30 years. Again, when prices have spiked like this in the past, those increased prices were sustained only over a 2 or 3 day period, not like the nearly 20 straight days that we just experienced. As a result, the energy needs/costs from between January 20th through February 9th were the most significant experienced in any other three week stretch in the past 30 years.
Since Thurmont reads its electric meters round the 13th of each month, this means that the next set of electric bills that customer’s receive will be based on their energy used between January 13th through February 13th. Unfortunately, this encompasses the entirety of this extreme cold weather, meaning electric consumption during this billing period will be significantly higher than last month’s bill. Preliminary estimates saw the Town’s overall power needs rise 25% relative to the previous billing period; therefore, customer’s on average should expect an increase in their electric usage of around 25% with the next set of bills they are going to receive. Again – the higher bill is a result of higher customer usage and not due to any increase in electric rates.
Fortunately, residential customers will also be receiving a second (and final) round of Legislative Energy Relief Refund Credits with this next set of bills. That credit will be approximately $55.00 per customer which will serve to significantly offset this increase in electric costs for residential customers.
It is important to note that the Town is Thurmont sets its electric rates for 12-month periods; therefore, the electric rates for customers have not changed. This means that the increase in these next electric bills is solely the result of increased electricity usage during this extremely prolonged period of freezing temperatures.
That being said, since we have under-collected electric revenues based upon the projected 12-month numbers, the Town is going to have to increase electric rates to recover this significant increase in energy costs experienced during this cold stretch. Thurmont’s next hearing at the Maryland Public Service Commission to adjust the Town’s Power Cost Adjustment (PCA) rate is set for March 12, 2026. Depending on the effective date that the Maryland Public Service Commission approves for Thurmont’s next PCA rate, customers can expect an increase in the Town’s electric PCA rate to occur in either April or May of this year.
The magnitude of the increase in the next PCA rate is not known at this time and will be calculated/determined by the end of this week after the February meter reading information is available. The Board of Commissioners and I will provide additional updates on the PCA increase once we have more information.
We know this isn’t good news and we wish we didn’t have to deliver it to all our electric service customers. This has been a difficult time for everyone, but we will get through it together. Questions and inquiries can be e-mailed to any of us or sent directly to the Town Office. Thank you.