PRECorp makes annual cost of power adjustments

Powder River Energy (PRECorp) has requested permission from the Public Service Commission to increase its Cost of Power Adjustment (COPA) by $1,386,882 per annum, effective on January 1, to reflect a change in wholesale power costs. This would lead to a modest increase on residential monthly bills.

In a second filing, the cooperative is also asking to make changes to the heat rate discount offered to members who have permanent electric resistance heat or electric heat pump space heating systems.

COPA is a mechanism that the cooperative uses to ensure it is only ever recovering from its members the cost of the power that is actually purchased from wholesale supplier Basin Electric. It’s calculated based on projected sales and power costs.

Every year, PRECorp estimates how much power will need to be purchased to cover members’ usage. At the end of each year, the cooperative looks back over the last 12 months and compares how much revenue was collected to cover the purchase of wholesale power to the actual expense that was incurred to buy that power.

The difference is not usually very large, but can be thrown off slightly by, for example, people using a little more or less residential power due to a colder or hotter season than expected. COPA is looked at annually, but doesn’t always require a change.

If it does, PRECorp files a request with the Public Service Commission at around this time of year, to become effective in January. This year, if the request is granted, a typical residential account using approximately 1000 kWh per month will see a change from $119.86 this year to $121.85 next year – an increase of $1.99.

A calculator is available for customers to calculate the impact COPA will have on their bill on the PRECorp website. Statements, comments, protests or interventions must be filed in writing with the Public Service Commission before December 22.

“Another area that is changing is the heat rate discount,” says Tim Velder, Marketing and Communications Specialist.

“Members who are equipped for this heat rate discount will see a larger discount on their bill.”

The heat rate is applied for electric resistant heat usage from October to April and is currently set at $.03875 per kWh. The new heat credit would be $.03975 per kWh.

Between October 2020 and April 2021, a total of 363 members on 389 meters were served under this tariff.

The heat credit is designed to equal PRECorp’s total avoided wholesale cost per kWh, based on the published electric heat rate from Basin Electric. Basin has proposed a change to its base rates for 2022 and PRECorp is aiming to revise its own heat credit accordingly.