Power Cost Adjustment
What is a power cost adjustment (PCA)?
The Power Cost Adjustment is a separate line item on each Nishnabotna Valley REC billing statement. It reflects the increases/decreases in the co-op's cost of power purchased wholesale from Northwest Iowa Power Cooperative. The change in the PCA from year to year is primarily caused by increases in the cost of generation. Changes in the PCA from month to month are caused by the consumption patterns of Nishnabotna Valley REC's members.
How Much is the PCA?
Nishnabotna Valley REC’s cost of wholesale power is now over 64% of our total expenses so it is critical that your cooperative makes sure that it recovers all of its wholesale power costs in its retail sales. The cost is collected from the co-op's members through the energy use charge and the Power Cost Adjustment.
Rising fuel costs directly affect electricity bills because they are a pass-through expense. The PCA is an increase or decrease, depending on the cost of generating and purchasing electricity. Periods of peak energy demand caused by cold or hot weather that lasts only a few days can cause your cooperative's average power cost to increase dramatically.
Why is this power cost adjustment necessary?
Effective October 1, 2011, Basin Electric raised its wholesale power rates to our power supplier, Northwest Iowa Power Cooperative, by 5 mills ($0.005) per kWh. On January 1, 2012, NIPCO passed this power cost increase on to Nishnabotna Valley REC. This increase is now reflected in NVREC’s PCA charges.
What Can I do? Nishnabotna Valley REC understands the strain that is caused by increases on your monthly bills. That is why we are dedicated to educating you about energy efficiency and how wise choices can help keep your use lower than average. Visit www.togetherwesave.com and download our publications that teach you how you can manage your energy use. It can be as simple as making a commitment to doing your family's laundry and dishes after 7:00 pm each evening to limit hot water consumption during the late afternoon hours.
Special Rates for Members who agree to allow NVREC to controll supply to avoid peak rates: Nishnabotna Valley REC promotes member participation in the Switch Makes Cents program. Switch Makes Cents participants agree to have radio-controlled switches installed on qualifying equipment. When electric demand grows to certain levels, the switches cycle the equipment off and on to control electric demand, thus saving electricity and helping decrease electric costs. The equipment automatically returns to normal operation when the Cooperative’s electric demand decreases.
Nishnabotna Valley REC also has rates that allow its members to reduce their electric costs by operating their on-site generation. During peak periods, these generators are automatically started by our load control system, which allows members to avoid peak rates, which historically are around 7:30 a.m. and 6:30 p.m.
Still want more information? Call us at 800-234-5122 to request information on energy efficiency and the Switch Makes Cents program. Nishnabotna Valley REC and its employees understand the impact these power cost adjustments have on our members. After all, our employees are local men and women who have to pay the same monthly bills you do. We want to let you know that we are in this together. You are owners of our cooperative and it is our job to work for your best interests.
