MEA fuel surcharge jumps 29% in Q3, adding $14.53 to average Mat-Su bill

Matanuska Electric Association members will pay roughly $14.53 more per month beginning in the third quarter of 2026 after the cooperative's board approved a 29.4% increase in its Cost of Power Adjustment, about 9.26% more than the second quarter rate.

The Cost of Power Adjustment rises from $0.07879 per kilowatt-hour to $0.10195 per kWh for the third quarter of 2026. That component makes up about 37% of the average residential bill, so the change adds up even though base rates stay flat.

What Drove the Increase

The biggest driver is a shortfall in the COPA's balancing account, which tracks the gap between projected and actual power costs. A colder-than-expected spring from March through May pushed electricity demand and fuel consumption above what MEA had forecast, leaving a deficit members must now repay through the surcharge.

Two other factors compounded the shortfall. Maintenance outages at neighboring Railbelt utilities cut the amount of lower-cost pooled power available to MEA. Lower water inflows across the Railbelt reduced hydroelectric output at the same time. Together, those conditions led MEA to rely more heavily on higher-cost natural gas generation to meet member demand.

New storage fees from Hilcorp added a third cost layer. Beginning in April, MEA began paying approximately $170,000 per month for Hilcorp's natural gas storage services. Those fees are now folded into the COPA calculation and pushed the fuel component of the rate from $0.06448 per kWh to $0.07142 per kWh. The purchased power component rose from $0.01573 per kWh to $0.01934 per kWh, driven by higher projected hydroelectric purchases under the Eklutna Power Purchase Agreement, modest increases in Bradley Lake power costs, and higher transmission wheeling charges.

Lower projected summer energy sales also contribute to the higher per-kWh recovery amount. Because power supply costs are spread across fewer kilowatt-hours sold, the per-kWh charge rises even when overall costs remain relatively stable.

How the COPA Works

MEA said the COPA passes fuel and purchased power costs directly to members without markup. When costs fall, the rate drops; when they rise, members cover the difference.

"MEA continues to actively manage power supply costs through long-term fuel contracts, regional power-sharing agreements, hydroelectric resources, battery storage, and operational efficiencies," the cooperative said. "While most factors affecting power costs are outside of MEA's control, the cooperative remains focused on providing safe, reliable, and affordable electric service to our members."

MEA said it expects the COPA to decrease once the balancing account shortfall is recovered, assuming fuel prices and member usage track current projections through the summer.