What is PCA?
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.