Lake Region Electric Cooperative
We understand that the electric bill makes up a large part of your monthly budget. That’s why we think you should know exactly what you are paying for. Learn more about Lake Region Electric Cooperative’s rate structure and the different components of your energy bill. If you're interested in viewing more information and tracking your usage patterns, register for SmartHub today!
Sample Residential Statement with Explanations
What is a PCA and why is it higher this month?
Members may notice a slightly higher Power Cost Adjustment (PCA) on their bill statements some months. While a portion of the co-op’s cost of power is included in our energy rates, the PCA reflects an adjustment for the actual cost of wholesale power (which is LREC’s largest expense) during each billing period.
Using a PCA allows for monthly changes as wholesale energy costs fluctuate, without having to continually restructure rates. Some months may see a higher rate due to extreme heat or cold causing additional demand resulting in increased power costs. This fluctuation is largely due to the changes in energy costs from the MISO market when power is purchased wholesale from Great River Energy. PCAs are a month behind, so the rate will appear on the bill following the relevant month.
How is my total PCA calculated?
Members can calculate their own PCA each month by multiplying the PCA amount (listed on the electric bill) by the kilowatt hours (kWh) used during the billing period. This formula charges all LREC members equally for the increase or decrease in the cost of generating electricity, based on their usage that month.
Facility Charge – Your co-op raised the facility charge from $21 to $24 per month in 2017. The facility charge recovers part of LREC’s investment in poles, wire, meters, maintenance and administrative costs necessary to provide electric service. According to our 2016 cost of service study, the true facility charge should be $37. The difference, between $24 and $37, is collected in the kWh rates. The increase in the Facility Charge was necessary to maintain the co-ops financial strength at a time when forecast kWh sales growth is relatively flat. While LREC has substantially lowered controllable expenses, the co-op continues to invest in the distribution system to improve electric service reliability.
KWh Charges – Recovers wholesale cost of electricity and substantial LREC investment in system (poles, wire, etc) and administrative costs necessary to provide electric service.