The City of Luling is a municipality that purchases power wholesale from another entity, then distributes that power to its citizens. The City of Luling buys the bulk of its power from the Lower Colorado River Authority (LCRA). The Fuel Adjustment is the part of your electric bill that directly reflects the fluctuating cost of generating power.
Whenever you see the Fuel Adjustment charge go up or down, it means the City of Luling is modifying it in order to purchase the power needed to provide electricity to all of its citizens.
How does the Fuel Adjustment affect my bill?
Part of the City of Luling's rate is used to recover a set amount of its power cost, or electric generation. As the cost of purchasing power rises above that set amount, the city adjusts the Fuel Adjustment rate in order to recover the additional cost. So, our rate doesn't change — the Fuel Adjustment rate does.
It's much like the cost of your car — your monthly car payment stays the same, but as gasoline prices at the pump change, so does the cost to use your car.
The main advantage to having a Fuel Adjustment charge that's responsive to fuel prices is that whenever fuel costs fall, the city's citizens aren't stuck with a higher Fuel Adjustment charge because it falls, too.