The Polar Vortex, also known as Winter Storm Uri, in February 2021 was a winter storm unlike any other event we’ve experienced in SWRE territory. For 12 consecutive days, we saw below-freezing temperatures. The Southwest Power Pool (SPP) who manages the generation and transmission of electricity in Oklahoma and 13 other states in the Midwest, was unable to meet the demand for power during this time. A few of our members experienced brief rolling blackouts issued by the SPP in an effort to protect the transmission grid and generation facilities from catastrophic failure. During the Polar Vortex, the price of natural gas skyrocketed from $2 to $3/MMBtu to over $1,200/MMBtu. SWRE members in Texas are included in the SPP service area; however, most of Texas is not and they experienced an even higher inflation on natural gas prices because of the actual failure of their grid system.

Over the years, the United States has been pushing for new electric generation to come from renewable energy sources (wind, solar, hydro, etc.) to reduce carbon emissions. This has led to a reduction in power generation from fossil fuels like coal and natural gas. Winter Storm Uri’s below-freezing temperatures, cloudy days and icy conditions were not suitable for renewable energy generation. Western Farmers Electric Cooperative (WFEC), our generation and transmission cooperative, was prepared for the storm with well-maintained and winterized coal and natural gas plants. However, conditions were not favorable causing natural gas compressors and pipelines to freeze up, which led to the dramatic price increases in fuel. Coal was the one generation source that operated at 100% capacity for the duration of Winter Storm Uri.

The financial impact of Winter Storm Uri will be felt by SWRE members, but not to the extent that many of our neighbors receiving power from for-profit utility providers—this is the Cooperative Difference. Additional fuel cost will be passed from the SPP to WFEC, and then to our members. SWRE’s portion of the additional fuel cost of Winter Storm Uri is $2.8 million. SWRE’s management and board of directors have worked diligently to minimize the financial impact of this to our members. The additional fuel cost passed to our members will be based on kWh usage, resulting in an approximate $3 to $4 increase on monthly bills over the next five years (estimate based on the average 1,200 kWh/month household). Members will begin seeing this increase on the monthly bill you will receive in February 2022. The increase will be reflected on the Power Cost Adjustment (PCA) section of the bill. It is important to keep in mind that the co-op is continuing to pay an inflated market cost for natural gas fuel which is also passed along to our members in the PCA. SWRE has not increased rates for our members.

We are fortunate in Oklahoma to have one of the cheapest rates for electricity in the nation. SWRE will continue to work on your behalf, providing you with safe, reliable, and affordable electricity. Please reach out to our member service team or me if you have any questions.

Jeff Simpson

Chief Executive Officer