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Power Cost Adjustment

PROVIDING ELECTRICITY AT COST

Power Cost Adjustment (PCA)

As a not-for-profit electric cooperative, Tipmont provides electricity to you at cost — meaning Tipmont does not profit from selling you electricity.

The Power Cost Adjustment (PCA) is included on your electric bill each month to reflect fluctuations in the true cost of power that Tipmont purchases to distribute to its membership. The fluctuation is largely caused by changes in the cost of fuel for electric generation. Tipmont receives no benefit or profit from the PCA.

 

POWER COST ADJUSTMENT

Managing fluctuating costs

Imagine you’re planning a weekend trip with your best friend. You’ve budgeted for gas, food, and activities. But what happens if gas prices suddenly jump up right before you leave? Or, parking at your destination is more expensive than you thought? You’d have to adjust your budget to make sure you have enough to do everything you planned.

The Power Cost Adjustment (PCA) on your electric bill works in a similar fashion.

Calculated each month as a separate line item on each member’s monthly bill, the PCA allows Tipmont’s monthly rates to stay consistent rather than changing with each fluctuation in the energy generation cost.

Power Cost Adjustment History

A note on wholesale power

Some months, the cost of wholesale power is below the base rate. The difference appears on your electric bill as a credit.

A note on wholesale power

Some months, the cost of wholesale power is below the base rate. The difference appears on your electric bill as a credit.

Breaking Down the Power Cost Adjustment (PCA) Formula

F=(A-B)/C+R

  • "F" in the Formula
The PCA is calculated each month by multiplying the amount charged or credited by the number of kilowatt hours used. For example: If the amount charged is .02420, and 1,000 kWh were used during the billing period, the PCA would be a charge of $2.42.
  • "A" in the Formula
This is the estimated total purchased power cost billed during the calendar year. Each month’s calculation uses a combination of estimated purchased power costs and actual purchased power costs as they become available.
  • "B" in the Formula
This is estimated revenue collected from customers for the recovery of purchased power cost for the calendar year. The revenue shall be estimated on the average purchased power costs per kWh included in base rates. Each month’s calculation should be updated with actual purchased power revenue as it becomes available.
  • "C" in the Formula

This is the estimated kWh sales for remaining billing months in the calendar year, applicable to “F.”

  • "R" in the Formula
This is the prior period Over / (Under) recovery of purchased power costs.
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