As we discussed in the March newsletter, a new line item will soon be listed on your electric bill for a Power Cost Adjustment or PCA. This is scheduled to begin in quarter three of this year. As we finalize how this will look on the bill, you may notice a line item for a PCA of 0.00 until we make this active on the bill.
One of our top priorities is providing reliable power at an affordable price. With so many variable costs that fluctuate month to month, it is sometimes hard to only collect what we need to operate. Remember, as a non-profit, making money is NOT our goal. Our margins come back to you, the member.
In order to help manage those variable costs, Wayne-White Electric will be implementing a PCA on your monthly bill beginning in July. Having the PCA will benefit members by covering monthly power cost fluctuations without having to continually restructure electricity rates.
The goal is to only collect what we need. If we do not collect enough through rates, an additional charge will appear. If we collect more than we need through rates, a bill credit will appear.
Here are some Q & As to hopefully help make understanding the PCA a little easier.
Q: So what exactly is a Power Cost Adjustment (PCA)?
A: A power cost adjustment (PCA) is a line item on electric bills that can be a charge or a credit. When the cost to produce power is higher than expected, a charge is used to recover the added costs. When the cost to produce power is lower than expected, a credit is applied to pass along those savings to members.
Q: What is the purpose of a PCA?
A: A PCA helps manage the fluctuating (increasing or decreasing) costs to purchase power. Members may see a PCA credit or charge on electric bills, depending on the wholesale power market. When the cost to purchase power in our regional market is significantly more or less than anticipated, our wholesale power provider, Hoosier Energy, passes the difference on to Wayne White Electric. In turn, we will now pass this charge or credit to our members.
Q: What is a PCA based on?
A: Members receive a PCA credit or charge based on the actual amount of energy they used during a billing cycle. Based on projected power costs in our budget this year and temporary reductions in costs, members should see a credit on the PCA line to start. For example, if you use 1,000 kWh for the month, you would see a $7 credit in the PCA line based on current projections.
Since we are projected to start off with the PCA as a credit on your bill, this will allow us to share our excess margins with members now, while still creating acceptable margins at the end of the year for capital credits. Remember, although the PCA should be a credit to start, it can always go the other way depending on costs.
We understand this change may be a little confusing at first, so if you have any questions, please give us a call at (618) 842-2196.