PCA - Power Cost Adjustment
What is PCA?
2024 Customer Notice:
Declining wholesale power costs allow NOVEC to lower its 2024 power cost adjustment (PCA) effective January 1, 2024. The 2023 $9.96 monthly PCA charge for a residential customer using 1,165 kilowatt hours (kWh) swings to a $21.38 credit in 2024. NOVEC customers use an average of 1,165 kWh per month. The 2024 PCA savings for all NOVEC customers totals approximately $135 million.
NOVEC does not earn a margin (profit) on wholesale power it purchases on behalf of its customers. Instead, changes in wholesale purchased power costs are passed through at cost to customers using the PCA line item on the monthly bill. As a not-for-profit electric utility, NOVEC’s rates and terms of service are regulated by Virginia’s State Corporation Commission.
PCA FAQs
What is the Power Cost Adjustment (PCA)?
As a not-for-profit cooperative, state law prevents NOVEC from earning a margin (profit) on electricity it purchases for delivery to customers. Instead, the actual cost of purchased power is passed through to customers without any mark-up.
Each fall, the co-op forecasts its energy costs and the amount of energy all of its customers will use the next year. While those forecasts are thoroughly researched, it is not surprising they differ from the actual purchased power costs.
NOVEC is required to reconcile the difference, and the reconciliation occurs through the PCA line item on customers’ monthly bills. The PCA can be a credit or a charge. Periodic changes to NOVEC’s PCA ensure the actual cost of purchased power is recovered without any margin (profit.)
How does NOVEC control its purchased power costs?
To protect against rising power costs, NOVEC locks in fixed prices and quantities for a substantial portion of the electricity customers are forecast to use. Because customers’ energy needs change daily, NOVEC cannot lock-in prices on all of the power it purchases.
