Belmont Light Sets Power Cost Adjustment (PCA) Charge Effective August 1

Category: Uncategorized   |   Posted On: July 21, 2026

What is happening?

Beginning August 1, 2026, customers will see a Power Cost Adjustment (PCA) charge of $0.0071 per kWh on their electric bills. This adjustment reflects higher wholesale electricity costs and helps recover the actual cost of purchasing power.

We are implementing this adjustment now to recover a portion of those costs gradually and help avoid larger adjustments later. We will continue to monitor wholesale power costs and revenues regularly and may adjust the PCA up or down, including changing it to a customer credit, if market conditions change.

For a typical residential customer using 550 kWh per month, the PCA charge is expected to increase the monthly bill by approximately $3.90.

What is the PCA?

As a not-for-profit municipal utility, we recover the actual cost of providing electricity to our customers. The Power Cost Adjustment (PCA) is a billing mechanism that helps ensure those costs are recovered over time while maintaining Belmont Light’s financial stability. The goal is to recover only the actual cost of providing electricity to our customers and not to generate additional revenue.

If actual power costs are lower than expected, resulting in an overcollection, the PCA can be used to provide customers with a credit. If actual power costs are higher than anticipated, resulting in an undercollection, the PCA can be used to recover those costs. This helps ensure that customers pay the actual cost of power over time without dramatic rate changes.

Is this a rate increase?

No. Your base electric rates have not changed. The Power Cost Adjustment is a separate line item that reflects changes in the actual cost of purchasing electricity. Unlike a base rate increase, the PCA can increase, decrease, or become a credit as wholesale energy costs change.

Why is the PCA appearing on my bill now?

The PCA is not a new charge. It has been part of Belmont Light’s bill structure and has historically been adjusted based on changes in the actual cost of purchasing power. The PCA has been set at different levels over time, including a charge, a credit, and $0, depending on market conditions.

We have used the PCA in both directions. For example, in 2016 (when the adjustment was known as the Purchased Power & Transmission Adjustment, or PPTA), we initially implemented a charge based on expected power costs. Later that year, after lower-than-anticipated power costs resulted in an overcollection, we adjusted the mechanism to provide customers with a credit. The PCA is designed to ensure that customers pay the actual cost of power over time—recovering costs when they are higher than expected and providing credits when they are lower.

Why is the PCA changing now?

We closely monitor wholesale power markets and review the PCA balance throughout the year. While we expected lower-demand spring months to improve the PCA balance, wholesale energy costs remained elevated and electricity demand exceeded expectations, creating an estimated $400,000 undercollection. Rather than allowing the undercollection to continue growing, we are implementing a modest PCA charge beginning August 1.

The current adjustment is based on actual power costs and projected electricity sales through the remainder of the year. Because wholesale energy prices remain volatile, we will continue reviewing the PCA regularly and make additional adjustments if necessary.

What is driving higher power costs?

Wholesale electricity prices across New England remain closely tied to the cost of natural gas, which fuels a significant portion of the region’s electricity generation. According to ISO New England, the organization responsible for operating the region’s electric grid and wholesale electricity markets, natural gas prices are a major driver of wholesale electricity prices because natural gas is the predominant fuel used to generate electricity in the region.

Are other electric utilities experiencing similar increases?

Yes. Utilities throughout New England continue to experience fluctuations in wholesale electricity costs as regional energy markets remain volatile. Because New England relies heavily on natural gas to generate electricity, changes in natural gas prices and fuel availability can have a significant impact on the cost of purchasing wholesale power. ISO New England notes that wholesale electricity prices are closely linked to natural gas prices, as natural gas is the region’s predominant fuel for electricity generation.

Many municipal electric utilities throughout Massachusetts use power cost adjustment mechanisms that allow them to recover—or credit—differences between estimated and actual wholesale power costs. These adjustments help utilities respond to changes in wholesale electricity prices without requiring frequent changes to their base electric rates. Similar mechanisms are used by other municipal light plants, including Concord Municipal Light Plant.