More On Electric Power Cost Adjustment

Councilman Steve Fought, in his newsletter to residents in his council district, was asked the following question and he provided his response.

Question-2.   When I got my utility bill there was an increased PCA (Power Cost Adjustment) charge.  What's the deal, I thought the city's decision to go to renewable energy eliminated rate fluctuation? 

ANS-2.  There's a couple of dimensions to that question.  The first is that we do buy on the market from time to time because our solar is not yet on line.  Balancing the supply (which right now is our wind energy) with the demand is a hands-on process and we attempt to be "long" in the market so we can sell the excess.  But that's not always possible -- and will continue to be a chore until the solar comes on line.  The temporary contracts to fill in the recent gaps have been more expensive than originally budgeted.

The other dimension is the transmission cost.  All energy goes onto the ERCOT (Electric Reliability Council of Texas) grid for distribution and ERCOT charges us to distribute the energy.  This month, an additional transmission cost of service (TCOS) charge has been added to the PCA charge to account for changes in the pass through rate since January.  This is a charge levied on utilities by ERCOT to recover the cost of investments in the ERCOT transmission infrastructure.  The fee is paid to ERCOT, who then distributes the funds to transmission companies in the ERCOT council/market. 

Given this explanation, it seems that we the ratepayers can expect a similar reduction in power cost whenever the solar farm comes online.

I for one am not holding my breath, but, we will watch for the cost reduction.