The fuel adjustment charge (also called the fuel cost recovery factor) is a variable component of your Entergy bill that reflects the actual cost of fuel used to generate electricity.
Unlike your base rate, which is set through regulatory proceedings and changes infrequently, the fuel adjustment changes monthly based on real market prices.
How It Works
Entergy generates electricity using a mix of natural gas, nuclear, and some coal and renewable sources. Natural gas is the largest component, so when natural gas prices rise, your fuel adjustment increases. When gas prices fall, the fuel adjustment decreases.
This pass-through mechanism means Entergy doesn't profit from fuel cost changes—they're simply passing along their actual costs. The Louisiana Public Service Commission and other regulators audit these charges to ensure accuracy.
Impact on Your Bill
The fuel adjustment typically adds 4 to 7 cents per kWh to your bill, though it can vary more widely during extreme market conditions. For a customer using 1,000 kWh per month, this translates to $40-70 in fuel charges alone.
| Component | Rate/kWh |
|---|---|
| Base energy rate | $0.045 |
| Fuel adjustment | $0.055 |
| Other riders | $0.035 |
| Total effective rate | $0.135 |
In this example, the fuel adjustment represents about 40% of your total per-kWh cost.
Why Fuel Costs Vary
Several factors drive Entergy's fuel costs:
- Natural gas market prices: The Henry Hub natural gas price is the primary driver.
- Power plant efficiency: Newer combined-cycle gas plants convert fuel to electricity more efficiently.
- Purchased power: When demand exceeds Entergy's generation capacity, they purchase power from other utilities.
- Nuclear generation: When nuclear plants are offline for maintenance, more gas-fired generation is needed.
- Weather extremes: Heat waves and cold snaps increase electricity demand.
Comparing Across Territories
Fuel adjustments can differ between Entergy's operating companies because each has a different generation mix:
- Entergy Louisiana and Entergy Texas rely heavily on natural gas generation.
- Entergy Arkansas benefits from nuclear generation at Arkansas Nuclear One.
- Entergy New Orleans purchases power from Entergy Louisiana and other sources.
Check your effective rate to see how your territory compares.