What is the Power Cost Adjustment?
The PCA is basically a fuel charge adjustment. Some months you will notice the PCA rate being a positive amount (a charge) and other months you will notice that it is a negative amount (a credit). When you combine the PCA rates over a 12 month period, the average is typically pretty close to zero.
The PCA rate changes each month depending on the wholesale cost Cedarburg Light & Water pays to purchase electricity. During months when there is a great demand for electricity, such as summer and winter months, the cost to purchase power is generally higher because the generating facilities in and out of Wisconsin need to rely on all of their generating equipment, even equipment that might not be the most cost-efficient. At “peak usage” times, excess power may also need to be purchased on the spot market.
Fortunately for customers of Cedarburg Light & Water, our power supplier, WPPI Energy does a great job securing cost-effective contracts in advance for the purchase of electricity that will be needed in all 50 of its member communities, like Cedarburg. Through this expertise, Cedarburg and other members have been able to avoid the excessively high fuel costs which have occurred in other areas of the state and nation.