What is the Power Cost Adjustment (PCA)?
The PCA is a rate mechanism electric utilities use to recover fluctuating purchased power costs. BMU currently purchases electricity from Kentucky Utilities at wholesale rates which are adjusted annually and fluctuate monthly with changes in fuel cost. The PCA enables BMU to recover these fluctuating wholesale power costs as they occur without overcharging or undercharging customers through fixed retail rates.
How is the PCA calculated?
The PCA is a fixed charge for kilowatt hour (kWh). The PCA total will depend on the number of kWh’s the customer uses during each billing period. BMU reviews and adjusts the PCA calculation on a monthly basis. The PCA calculation is determined by reviewing the difference between the amount BMU actually pays KU for wholesale power and the amount BMU collects through its monthly electric rates to the customer. The PCA is then increased or decreased to reconcile the amount that BMU under collects or over collects.
