Belmont Light sets Power Cost Adjustment charge to deal with rising energy prices (Updated June 2022)
Category: Uncategorized | Posted On: February 10, 2022
What is Happening?
As the New England power grid deals with soaring energy prices resulting from a sharp increase in the cost of natural gas, Belmont Light is in turn facing rising power costs. To deal with this situation, we are setting our Power Cost Adjustment (PCA) to a charge of $0.011 per kWh for all customers through the end of calendar year 2022. For the average Rate A residential customer (500 kWh per month), this may mean an increase of approximately $5.50 per month. For the average Rate B commercial customer (1750 kWh per month), the increase may be approximately $11.725 per month.
What is the PCA?
The PCA, previously known as as the Purchased Power & Transmission Adjustment (PPTA), is an instrument used by Belmont Light to either credit or charge customers based on actual costs for power compared to estimated costs. If, in our year-end financial review, Belmont Light discovers that we have overcharged customers for the power that we procured, the PCA may be used as a credit for all customers. Vice versa, if the financial review shows that Belmont Light undercollected for the power it provided to customers, the PCA may be used as a charge to recover those costs.
How has the PCA operated in the past?
Belmont Light has used the PCA over the years as both a credit and a charge. For example, the PCA (then called the PPTA) was set as a charge of $0.0065/kWh on January 1, 2016, but a mild winter and early spring led to an overcollection of $489,000. Upon discovering this during a midyear financial review, Belmont Light adjusted the PCA to a credit of $0.0085/kWh on August 1, 2016 in order to refund customers for the overcollection.
Are other electric utility companies doing the same?
Yes, the soaring energy prices are affecting our industry as a whole, especially in New England, and utility companies have been forced to brace for the higher costs. The region’s largest utility company, Eversource, increased its Electric Supply Rate by more than 5 cents per kWh for residential customers on January 1, 2022 (Note that Eversource also charges customers an Electric Delivery Rate of $0.13688/kWh for a current total of $0.29452/kWh). That means an increase of over $25 per month for the average residential Eversource customer using 500 kWh.