TOWN NOTICE: What is the Power Cost Adjustment?

What is the Power Cost Adjustment on my electric bill?

The Power Cost Adjustment (PCA) is a separate line item on each Town of Front Royal Electric Bill statement which reflects the increases/decreases in the Towns cost of purchased wholesale power. The PCA is a per kilowatt hour charge that covers the varying monthly costs for generating electricity. Things like fuel costs, electric load, and weather all impact the cost of producing energy.

Because the electric rate we charge our customers for energy is fixed, but the rate we pay for that same energy varies, we can “true-up” the cost with the PCA. Think about it like this – when you fuel up your car, the price of gasoline can change from day to day. Those same fluctuations affect the price of creating and delivering electricity.

These increases prompted the Town to reach out to GDS Associates, a third-party organization, to perform a “Cost of Service Study.” The Study was used to determine an electric rate structure that will recover the cost of serving our customers. With the proposed rate adjustments, the customer charge and energy charge will increase while the PCA will decrease.

Computing the Power Cost Adjustment.

The Power Cost Adjustment on an electric bill statement is computed by multiplying the amount charged by the number of kilowatt hours used. For example, if the amount charged is .02323, and 1,000 kilowatt hours were used during the billing period, the Power Cost Adjustment would be $23.23.

If you have questions, please do not hesitate to contact the Energy Services Department at (540) 635-3027 or the Finance Department at (540) 635-7799.

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