Temporary Power Cost Adjustment
IREAâ€™s Board of Directors at its January 2021 meeting approved a temporary Power Cost Adjustment (PCA) to recover an unanticipated 20% increase in 2020 power costs.
The additional power costs were due to a year-long outage of the Xcel Energy-operated Comanche Unit 3 power plant, which typically supplies more than 50% of IREAâ€™s energy needs. During that downtime, IREA had to purchase replacement energy from Xcel at more than twice the cost of Comanche-produced energy.
We were able to defer these additional costs and will seek to recover them from responsible parties but must, in the meantime, have enough revenue to cover expenses. Our forecasts show we need to recover $9 million in 2021 and $9.3 million in 2022.
Beginning in April 2021, the PCA will recover costs this year and next from all rate classes, based upon usage. An energy rate will be calculated each month and applied to your monthly bill. Those monthly amounts will likely be smaller in 2022.
This temporary PCA will be discontinued after December 2022, or possibly reduced or eliminated before then if IREA recovers the additional power costs from another party.
The monthly PCA will first appear as a line item on your April 2021 bill.
Through December 2022, unless IREA is able to recover additional power costs from other parties, in which case we may discontinue it ahead of schedule.
Each monthâ€™s PCA is based on your usage that month, which is multiplied by the corresponding monthly PCA rate above. For example, the PCA on your April bill is the amount of kilowatt-hours you used in the April billing cycle multiplied by $0.00508.
Yes. It will change based on fluctuations in your energy usage and the PCA rate, which varies from month to month. The rate for each month will be posted to this website.
Yes, but only by lowering your energy usage.
Expenses related to actual power used by IREA customers. IREA is a cooperative and does not operate for profit. Our goal is to provide reliable, affordable electric service. The association typically returns profits or margins to customers via capital credits. When we encounter unexpected power costs, however, we sometimes need customers to help cover them.
Yes. In December 2017, we used the PCA mechanism in our Rates and Regulations to credit IREA customers $8.4 million in reduced wholesale power expenses.
Capital credit retirements refund money collected from IREA members in prior years. These retirements are paid on a 20-year cycle to both former and current members who have an equity stake in the cooperative based on their electric payments. The members receiving capital credits from the years 2000 through 2019 should not have to forego them because of increased power costs due to the 2020 Comanche Unit 3 outage. We need revenue from the PCA to offset these additional power costs and to maintain earnings sufficient to meet a key financial metric, Debt Service Coverage, which measures the cooperativeâ€™s ability to make its principal and interest payments.
If you have any questions about the PCA not addressed above, call us at (800) 332-9540, 7 a.m. to 7 p.m. Monday through Friday, or email us at CustomerContact@IREA.coop.