Utilities director says widening gas basis is driving up power costs and straining the PCA

Ed Liberty, the city's utilities director, told commissioners on Sept. 25 that the "basis," the differential between the benchmark natural gas price and the delivered burner‑tip price, has widened and is increasing the city's cost of power. "The basis, which is the differential between gas price at the hub and gas price at the burner tip of the plants where the the gas is actually used, that differential has gotten rather significant and continues to, to be an issue not just for us, but for all of the utilities in the state," he said. Liberty said the result is upward pressure on the Power Cost Adjustment (PCA), the pass‑through component that affects customer bills.

Liberty also told commissioners that overall electric sales are up and that base revenues are growing, which helps fund balance: "year to date, we're still over 3%." Commissioners and staff discussed options to mitigate customer impacts, including potential accounting changes that could shift some gas‑related monetization revenues from base revenues toward PCA relief. No formal action was taken; staff offered to provide detailed runs of the numbers for the commission to review before considering policy changes.