New 2025 Power Cost Adjustment

What does the line for PCA mean on my power bill?

A PCA, or Power Cost Adjustment, is a pass-through that reflects the increases/decreases in the co-op’s cost of power purchased from its wholesale providers.

Why use a PCA?

Wholesale power cost is an electric co-op’s largest expense. While a portion of the co-op’s cost of power is already included in energy rates, a PCA allows for flexibility (rather than continually restructuring rates) as wholesale energy costs fluctuate.

What is the difference between monthly and fixed PCAs?

Currently, LREC’s PCA is calculated on a monthly basis, which reflects the difference between LREC’s wholesale cost of power from Great River Energy (GRE), our provider, and the cost of power built into our energy (kWh) rates. The monthly PCA can be in the form of a credit or a charge on your monthly bill due to variables like wholesale market pricing, the cost of natural gas for GRE’s peaking power plants, and high demand due to extreme weather conditions.

For 2025, LREC’s Board of Directors has approved the use of a fixed PCA charge to recover an increase of approximately 7% in GRE’s wholesale power rates. This increase is primarily driven by the transition to more renewable energy and inflationary pressures facing the electric industry. To support this transition, GRE is investing in new wind generation and construction of new transmission lines that will help strengthen the electric grid and transport renewable energy throughout the state. The fixed and monthly PCAs will be combined on the PCA line of your bill. We anticipate the PCA charge will be approximately $6.50 per month for the average residential member using 1,000 kWh per month.

We will continue to keep you informed in our newsletter, on our website, and on social media once the annual PCA is finalized for 2025.