Why a Power Cost Adjustment
(PCA)?
As energy costs fluctuate, the PCA is a way
to reflect changes in the cost of power without completely
restructuring the cooperative’s existing rate schedules. The concept
is that as the cost of purchasing electricity changes, the retail
charge for electricity should change accordingly.
Do other utilities use a PCA?
While the terminology may vary, most utilities have an adjustment
for fluctuating costs related to power production and market
purchases. You may hear these referred to as a Fuel Adjustment
Clause or a Wholesale Power Adjustment but they are fundamentally
the same.
Are others paying higher prices?
EnerStar is not the only utility experiencing higher power prices.
Investor owned utilities, municipal utilities, and other
co-ops are also subject to increased market costs. Those with
fuel adjustment clauses will utilize them as a way to offset
cost increases. Other utilities may file rate increases which require more time to enact and is a more permanent way of recouping
additional costs.
What is the coop doing to minimize this volatility?
Through it’s membership in Wabash Valley Power Association, EnerStar
is able to take advantage of economies of scale within the energy
market that it would not otherwise be able to.
How is the PCA billed?
The PCA is applied to all kilowatt hours consumed and will be in effect for all
rate schedules. A cost increase will appear on a member bill as a
PCA charge while a cost decrease would appear as a PCA credit. You
will find this listed as an item in the Current Statement section of
your bill.
How long will the PCA be affecting my power bill?
It is difficult today to predict how long it will be in
effect. The PCA may be adjusted by the coop board as frequently as
monthly. In recent months, energy prices have increased dramatically
in response to natural gas, crude oil, and coal having risen to
record levels. Once wholesale energy prices decrease, you can expect
the PCA to decrease accordingly.
How can I reduce my bill?
Conserving energy is the best option for reducing one’s electric
bill. From adjusting your thermostat to adding home insulation,
there are a number of inexpensive ways to reduce energy consumption.
You may visit the Department of Energy’s website, or
visit our Energy
Advisor area. |
