Power Cost Adjustment (PCA)
Notice of Implementation of Power Cost Adjustment
At the City Council meeting of March 7, 2023, in open session, the City of Colton presented information regarding the current fiscal state of the Public Works and Utility Services Department, Electric Division, and the impacts the dramatic increase in natural gas prices are having on the financial stability of the Electric Division.
The City of Colton utilizes natural gas to generate power at the City owned electric power plant and when power is purchased from other resources, those agencies also use natural gas to generate power. The natural gas prices are controlled by the gas provider and passed on to the consumer. In this case, the consumer is all electric utility producers that use natural gas to generate power. The impact to the City of Colton, as well as all Municipal Utilities throughout California, has been extremely significant.
In order to offset the extreme increased expense for power, the Electric Division is implementing the Power Cost Adjustment (PCA) component of the electric rate. The General Provisions of the City of Colton adopted Customer Service Policy provides for the implementation of a PCA charge, per kWh, to adjust the Utility's electric rates for actual costs. Actual costs include, but are not limited to: the cost of purchasing electric power, generating electric power, providing energy to service the City of Colton utility customers, and to minimize fluctuations in rates.
The PCA charge, effective April 1, 2023, will be implemented at the rate of $.085/kWh. Residential, commercial, and industrial customers will see this as a separate line item on their utility bills. The average residential customer's electric bill, for 500 kWh usage per month, will change from approximately $71.26 per month to approximately $113.76 per month.
We encourage all electric utility customers to be prudent in their conservation efforts as energy efficiency is more important than ever. To find out more ways to save energy, or make a payment online, visit us at www.coltononline.com.
Q & A
Q. WHAT DOES PCA ON MY BILL STAND FOR & WHAT IS A PCA USED FOR?
A. Power Cost Adjustment. The PCA is used to adjust the Electric Department's electric rates for the actual cost of purchasing and generating electric power to service the City's Customers and to minimize the fluctuations in rates.
Q. WHAT IS THE COLTON ELECTRIC UTILITY PCA AMOUNT?
A. $0.085 per kWh Consumed
Q. WHO APPROVED THIS?
A. Per the City of Colton’s Rules and Regulation No. 22 Sub-Section – Special Conditions item (5) under Electric Department Charges, all Colton Electric Utility Customers rates are “subject to the PCA. The applicable PCA billing factor set forth therein will be applied to all kWh billed under this schedule.”
Q. HOW LONG WILL THE PCA BE ADDED TO MY ELECTRIC BILL?
A. The PCA will be implemented from April, 1, 2023 through June 30, 2024. The PCA end date is subject to change and could end sooner, may be reduced, or could be extended, pending the results and implementation of the Cost of Service study (COSA).
Q. WHAT IS A COST OF SERVICE STUDY (COSA)?
A. A study to determine the total costs incurred by a utility in providing service to its customers and the allocation of those costs to customer classes by determining rates and rate structures.
Q. IF I PARTICIPATE IN THE LOW INCOME PROGRAM WILL I BE IMPACTED?
A. No if you are already enrolled in the low income program or plan to enroll you will not be impacted. You will still see the PCA charges on your bill, however the Low Income Assistance Program will apply a credit to your account, so that your bill does not increase because of the PCA.
Q. IS THERE SOMEWHERE I CAN FIND MORE INFORMATION REGARDING THE ELECTRIC RATES AND UTILITY INFORMATION?
A. Yes. You can find more information regarding the electric rates and utility information by going on line to: www.coltononline.com
Q. WHY DO WE HAVE TO PAY THE PCA WHEN MEASURE “S” WAS PASSED BY THE VOTERS AND IS ALREADY BEING COLLECTED BY THE CITY?
A. Measure “S” is a sales tax increase on costs of goods sold at retail locations and does not provide any monetary adjustments to the electric utility.
The PCA is a mechanism to adjust the Electric Department's electric rates to reflect the actual cost of purchasing and generating electric power to service the City's Customers, and to minimize the fluctuations in rates.