The recent rising inflation rate is putting upward pressure on costs of everything for everyday living, including energy. WPPI Energy, the power provider to SPU, rates structure reflect the actual realized seasonal market pricing with the monthly power cost adjustment (PCA) billed to Sun Prairie Utilities. This will also then be reflected similarly to the monthly SPU rate payer bills. SPU rate payers can expect to be paying relatively lower PCA per kWh in the months that regional energy market demands and pricing are lower, and pay relatively more PCA per kWh in the months that regional energy market demands and pricing is higher.
SPU rate payers should see lower relative PCA through the winter, spring, and fall months, but higher relative PCA through the summer season when air cooling load is increased and market pricing is higher. SPU wishes to inform our rate payers now to have a realization that these first few months of 2022 should be at a lower PCA, with steeper PCA increase to be expected through the summer season.
The power cost adjustment is a mechinism that state regulators utilize in approved tariffs to account for the monthly volatility of purchased power to serve end users. The approved tariffs have a base cost allocated for power purchases. If the monthly purchase costs are lower than the tariff allocation, then a credit is awarded to customers for each kilowatt hour billed. If the monthly purchase costs are higher than the tariff location, then a charge is applied to customers for each kilowatt hour billed. The PCA is a separate line item on every monthly electric billing.