Understanding the Power Cost Adjustment Charge (PCAC)
The PCAC is a billing mechanism used to pass the actual cost of purchased power to customers equitably.
RUC purchases your power through its wholesale power supplier, WPPI Energy. Your bill’s PCAC reflects any recent fluctuations in our nonprofit utility’s wholesale costs for the generation and transmission of electricity.
The PCAC can increase or decrease monthly depending on variations in weather, customer usage, fuel costs and many other factors. The PCAC may be positive or negative based on these factors.
Why is the PCAC needed?
Because our local utility operates on a not-for-profit basis, the cost of the power we purchase in order to serve you is passed through to you at neither a profit nor a loss. The cost to purchase wholesale power is by far our utility’s largest operating expense. And, wholesale costs can vary dramatically each month depending on seasonal changes, fluctuations in customer demand, increasing fuel costs, and other factors.
Without the PCAC, our local utility would need to raise its rates more frequently in order to absorb any unexpected wholesale cost increases. As your locally owned electric utility, RUC exists solely for the benefit of our customers, and the PCAC is one tool we use to help keep your rates as low as possible.
The PCAC, which is part of every Wisconsin municipal electric utility’s retail rates, was implemented by the Public Service Commission of Wisconsin to ensure that our municipally owned utility recovers the costs for the wholesale power it purchases on your behalf, while also ensuring that we collect no more than our actual expenses.