What is a Power Cost Adjustment (PCA)?

People's Energy Cooperative members may see a PCA charge or credit on their electric bill as the cost of power on the energy market goes up or down.  See below for more information.

A power cost adjustment (PCA) is a line item on electric bills that can be a charge or a credit.

When the cost to produce power is higher than expected a charge is used to recover the added costs.

When the cost to produce power is lower than expected a credit is applied to pass along those savings to members.

A PCA helps manage the fluctuating (increasing or decreasing) costs to purchase power.  Members may see a PCA credit or charge on electric bills, depending on the wholesale power market.

When the cost to purchase power in our regional market is significantly more or less than anticipated, our wholesale power providers, Dairyland Power Cooperative or Interstate Power and Light, pass the difference to People's Energy.  In turn, we pass this charge or credit to our members.  (Read more about MISO regional energy market below.)

We provide transparency on electric bills with a PCA, so our members know what they are paying for.

Members receive a PCA credit or charge based on the actual amount of energy they used during a billing cycle.

For example, the PCA charge on February 2022 electric bills was just under one cent ($0.0008) per kilowatt-hour (kWh) used in January 2022.  This was an increase of $0.80 for a member using 1,000 kWh per month.

Members can calculate their own PCA each month by multiplying the PCA amount (listed on the electric bill) by the kilowatt hours (kWh) used during the billing period.  This formula charges all PEC members equitably for the increase or decrease in the cost of generating electricity, based on their usage that month.

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 coal 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.

Yes.  As the wholesale cost of power fluctuates with supply chain, high demand, and inflation challenges, People's Energy members are seeing - and will continue to see - more frequent power cost adjustments on their electric bill - either as a charge or a credit.

Power Down: Enroll to receive Peak Alerts by phone, email, or text asking you to conserve when regional demand and costs are high on the hottest days of summer and the coldest days of winter. 

Reducing peak demand helps reduce the wholesale price People's Energy pays for electricity - and PCAs, which helps hold your rate steady and reduces the need for power generation, which also helps reduce carbon emissions.

Cut costs and carbon! Every little bit helps:

> Reduce electricity during peak periods.
> Raise your thermostat 4 degrees in the summer, and lower it in the winter.
> Wash laundry and dishes before or after peak periods.
> Shut off lights and electronics when not in use.
> On nice days, use a clothes line to dry clothes.
> Use a grill or microwave for cooking, instead of oven and stove in the summer.
> Water outside and run your well during off-peak and overnight hours.

> Charge your electric vehicle during off-peak and overnight hours.
> Check for air leaks and caulk around doors, windows and wherever pipes and wires enter your house.
Do the 'Summer Shift' - Reduce electricity when demand and cost are highest across the region, summer weekdays, 11 a.m. to 7 p.m.

Lower Your Electric Bill
Visit our Energy Saving Resources or give us a call.  Our member service representatives are here to assist with billing questions and high electric bills M-F, 7:30 a.m. to 4:00 p.m., (800) 214-2694.

Minnesota Energy Assistance
Your household may be eligible for the Minnesota Energy Assistance Program, based on income and size.  Visit Energy Assistance for more information.

MISO is the regional authority that manages the electric grid for 15 states, including Minnesota and Manitoba, Canada.  It was created in 1998 and is one of seven regional transmission organizations (RTOs) in the United States.  See energy market display with demand and pricing on MISO's website.

As a generation and transmission cooperative, Dairyland Power Cooperative sells the power it generates, and purchases the power it needs for members through MISO, the Midcontinent Independent System Operator.

People's Energy does not own power plants or generate its own electricity.  We are a distribution cooperative that purchases wholesale power from Dairyland Power Cooperative and Interstate Power and Light.