The Power Cost Adjustment (PCA), otherwise known as the “tracker,” is applicable to all of the Kosciusko Rural Electric Membership Corporation’s (KREMC) retail rate schedules and is applicable to all kWh sales thereunder.  The PCA allows KREMC to increase or decrease its approved rates based on increases and decreases in its cost of wholesale power purchased for resale.


Monthly bills computed under the appropriate retail rate schedule will increase or decrease by an amount equal to the kWh purchased by the customer during the month multiplied by the PCA factor in effect during the month.


The PCA Factor is determined on a projected basis and is expressed in dollars per kWh rounded to the nearest one hundredth of a cent ($.0001).  The following formula is utilized to determine the PCA factor:

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(A)  Projected Power Costs equals the total purchased power costs estimated for the projected period. The projected period is normally a calendar year, but can also represent other time periods if deemed necessary. KREMC will prepare the projected power cost in conjunction with its annual budget process but reserves the right to make adjustments at other intervals due do unexpected changes in projected units purchased or the applicable wholesale rate.

(B)  True-Up Adjustment equals an amount necessary to correct (refund or recover) for the over/under recovery of KREMC’s actual purchased power costs during previous periods. KREMC will determine the actual PCA over or under recovery each month and will accumulate the total net over or under recoveries. KREMC will make adjustments that, based on its sole judgment, are appropriate to keep the total net over or under recoveries as nearly as practical equal to zero. However, when and if the total net over or under recovery exceeds a level deemed extraordinary by the board of directors, KREMC will immediately make a true-up adjustment commencing with the next billing month.

An over or under recovery is defined as the difference between the actual purchased power costs incurred by KREMC during a month and the amount recovered through the PCA during the same month. The amount recovered through the PCA equals the sum of PCA factor applied during the month and the PCA Base multiplied times the energy (kWh) sales for the month.

(C)  Projected Energy Sales equals the energy sales (kWh) projected for the same period as the Projected Power Costs.

(D)  PCA Base equals the average power cost per kWh sold included in retail rates

(E) = 1 minus the Utility Receipts Tax and similar revenue based charges in percent


The current PCA factor and the historical PCA factors applied by KREMC are available by contacting KREMC’s office.

Board Approved:  September 26, 2005
Effective Date:  October 1, 2012
Revised Date:  October 1, 2012