At center of oil boom, electricity costs soar

At center of oil boom, electricity costs soarBy Tom Fowler | The Wall Street Journal

An oil-production boom is delivering prosperity to pockets of the U.S., but in West Texas, the epicenter of activity, it is also bringing trouble in the form of surging electricity prices.

Many municipalities and businesses are bracing for big surcharges this year, after having been hit hard last summer, as energy use by oil drilling and production equipment outpaces the capacity of the region’s power grid. State regulations largely shield residential customers from the added power costs.

In Midland, a city of about 112,000 residents where the unemployment rate was just 3.3% in May, electricity costs for offices and facilities operated by the city climbed more than 20% in 2012, to $4 million, despite using about the same amount of power as in the previous year. “Last year, the surprise charges were quite shocking, actually,” said Robert Patrick, director of general services for the city.

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