Power Cost Adjustment
What is the Power Cost Adjustment?
The Power Cost Adjustment (PCA) is a line item on your bill that provides a credit or an additional charge per kWh based upon the actual cost of electricity as compared to the expected cost. PCA has been listed, as needed, on the bill statements for many years
What is the purpose of a PCA?
A PCA helps manage the fluctuating (increasing or decreasing) costs to purchase power.
When the cost to purchase power in our regional energy market is significantly more or less than anticipated, our wholesale power provider, Dairyland Power Cooperative, passes the difference to Riverland Energy, and we pass a charge or credit to our members.
What is my PCA based on?
Members receive a PCA credit or charge based on the actual amount of energy used during a billing cycle.
What factors impact the price of power (wholesale power market?)
1. We are seeing higher costs to generate power because natural gas and coal prices are high; both natural gas and coal are used as fuel to generate electricity. In addition, many coals plants are in conservation mode due to inadequate coal supplies caused by rail shipping.
2. Transmission lines that move renewable energy from where it is generated to where it is needed are congested. This raises energy market prices.
3. In the fall and spring, electricity needed by consumers is lower and power plants use this time to conduct much needed maintenance before winter and summer peak seasons. These scheduled outages for maintenance lower the power supply, which increase prices on the energy market.
Are PCA charges expected?
Yes, they may be necessary. As the wholesale cost of power fluctuates with supply chain, high demand and inflation challenges, members are seeing—and will continue to see—more frequent power cost adjustments on their electric bills—either as a charge or a credit.
What can you do?
What's the power cost adjustment on my electric bill?