At the November 2024 board meeting, our board determined that a Power Cost Adjustment (PCA) is necessary to maintain the cooperative’s financial stability and continue providing reliable service to members. ECE will be adding a recurring monthly PCA to member bills due in February 2025.
FREQUENTLY ASKED QUESTIONS
What is a Power Cost Adjustment?
This is a method used by cooperatives to adjust members’ electricity rates based on the fluctuating cost of purchasing power; a PCA helps ensure members pay a fair price reflecting actual costs. ECE receives a PCA on our own monthly power bill from our supplier, Great River Energy (GRE); we just haven’t passed those costs on to members in recent years.
How much will the PCA be?
The PCA amount is not a fixed cost. It will vary based on individual member usage and will be determined by the fluctuating cost of power. This means the PCA amount will be different for every member depending on their electricity consumption.
How is a PCA different from a rate adjustment?
PCAs are more flexible than rate adjustments. They reflect short-term changes in power costs without permanently altering the base rate for electricity. ECE will undergo a cost-of-service study in 2025, at which point we’ll reassess base rates.
ECE hasn’t added PCAs to bills since 2018. Why is it necessary now?
Upon receiving forecasted energy rates from GRE, it became evident that ECE could no longer absorb the rate and PCA changes from GRE without an adjustment to our base rates. Implementing the PCA ensures that we can continue to provide reliable service and meet our financial obligations.
Will reinstating a PCA result in higher profits for the co-op?
No, ECE does not make a profit from the PCA. It’s simply a way to pass along the increased costs we’re experiencing from GRE, ensuring that the additional costs are equitably spread among our members based on their energy use.
How can members reduce future PCA charges?
Members can help mitigate future PCA increases by reducing energy usage during peak times, such as early mornings and evenings when demand is highest. Investing in energy-efficient appliances and participating in load management programs are other great ways to lower costs. Combined with similar actions of other members, daily habits can greatly impact the co-op’s financial future!