What is a PCA and why is it higher this month?
Members may have noticed a slightly higher Power cost Adjustment (PCA) on their bill statements. While a portion of the co-op’s cost of power is already included in our energy rates, the PCA reflects an adjustment for the actual cost of wholesale power (LREC’s largest expense) during each billing period.
Using a PCA allows for monthly changes as wholesale energy costs fluctuate, without having to continually restructure rates. The higher PCA this month is due to increased power costs caused by additional demand during the extreme heat we have experienced in June-July. PCAs are a month behind, so June’s appeared on the July bill and July’s appeared on the August bill. This fluctuation is largely due to the changes in energy costs from the MISO market when power is purchased wholesale from Great River Energy.
How is my total PCA calculated?
Members can calculate their own PCA each month by multiplying the PCA amount (listed on the electric bill) by the kilowatt hours (kWh) used during the billing period. This formula charges all LREC members equally for the increase or decrease in the cost of generating electricity, based on their usage that month.