WHAT IS A POWER COST ADJUSTMENT?
A Power Cost Adjustment (PCA) is a mechanism that adjusts members’ electric bill based on fluctuations in the cooperative’s cost of purchased power from Great River Energy (GRE) and wholesale power increases from GRE and Western Area Power Administration (WAPA). Members will see a line-item charge on their billed listed as PCA.
What is a Power Cost Adjustment (PCA)?
A Power Cost Adjustment (PCA) is a mechanism that adjusts members’ electric bill based on fluctuations in the cooperative’s cost of purchased power from Great River Energy (GRE) and wholesale power increases from GRE and Western Area Power Administration (WAPA). Members will see a line-item charge on their billed listed as PCA.
How the PCA Works
The PCA will be calculated based on your monthly kilowatt-hour (kWh) usage, meaning the dollar amount may fluctuate from month to month depending on your energy consumption. There are two components to the PCA:
- Monthly PCA from GRE: This portion may be either a credit or a fee, depending on GRE’s power purchase expenses and their need to pass on a monthly PCA. This dynamic adjustment reflects fluctuations in the cost of power on a month-by-month basis.
- Annual Rate Increases from GRE and WAPA: This portion of the PCA ensures that TWEC can cover the annual cost increases from our power suppliers.
What are the benefits of the PCA?
It allows the cooperative to avoid larger, less predictable rate increases and maintain consistent service quality that our members deserve.
Why is the PCA necessary?
The PCA allows TWEC to respond to changes in the cost of power supply without adjusting base rates, ensuring fairness and flexibility. By tying the PCA to actual usage and supplier costs, we can better align expenses with revenue while maintaining financial stability for the cooperative.
2026 PCA Update
The Power Cost Adjustment (PCA) on this month’s bill reflects higher wholesale power costs
passed through from Great River Energy (GRE). An extended period of unusually cold weather
in January drove electricity use higher across the Midwest, creating very high demand on the
regional electric grid. This led to significantly higher electricity prices in the wholesale market.
Great River Energy and other utilities throughout the region were able to ensure the system remained safe and dependable during the cold stretch. Sufficient generation and system capacity
were available to meet the need. Because the recent adjustment from GRE was tied to energy costs rather than demand, the cooperative applied the PCA across all rate classes so the costs are shared more fairly among members.
This PCA will apply to all rate classes. Previously, it applied only to general service, large power, and three-phase rates only. Interruptible rates were excluded because they reduced demand, but the PCA now reflects energy costs, not demand, so applying it to all rates ensures fairness. The PCA is calculated the same way as your energy charge: the PCA rate (per kWh) multiplied by the number of kWh used. Members with more than one service or rate (such as General Service and Dual Heat) may see multiple PCA line items tied to each service’s usage.
Where Can Members Get Help with High Electric Bills and Billing Questions?
Your household may be eligible for the Minnesota Energy Assistance Program, based on income and size. Visit Account Management for more information.
Members can contact the office for additional billing questions at 1-800-321-8932 or 218-631-3120.
