What is the Power Cost Adjustment or PCA item on my electric bill?
- A Basic Explanation.
The Power Cost Adjustment is a separate line item on each of the Village’s Electric bill statement which reflects the increases/decreases in the municipality cost of power purchased wholesale from American Municipal Power. The fluctuation in the Power Cost Adjustment is largely caused by changes in the cost of fuel for generation.
The municipality cost of wholesale power is now more than 75 percent of Greenwich’s total expenses, so it’s critical that the Village makes sure that it recovers all of its wholesale power costs in its retail sales. The cost is collected from the municipality members through the energy charge and the Power Cost Adjustment.
- A portion of the municipality cost of power is already included in the energy rate (commonly referred to as the base rate).
Presently 6.1 cents per kWh is included in the base rate for the cost of wholesale power. When the cost of power is greater than the amount included in the base rate, the Power Cost Adjustment is a charge. When the cost is less, the Power Cost Adjustment is a credit. In more recent years, the cost of producing and delivering the power we buy has exceeded the amount in the base rate. Therefore, the Power Cost Adjustment has been a charge.
- Computing the Power Cost Adjustment.
Each month, the Village’s running three month average power supply cost per kWh shall be determined by dividing (1) the sum of the most recent three months’ total power supply costs from all suppliers, including costs associated with ownership and operation of generating facilities owned in whole, or in part, by the Village, developmental costs associated with power supply resources, transmission related charges and ancillary service fees, by (2) the total energy delivered to the Village during the same three month period. Any increase or decrease per kWh above or below the base power supply cost of $0.0610 per kWh shall be determined to four decimal places and any resultant differential shall be multiplied by 1.10 to compensate for the Village’s distribution system energy losses.