Power Cost Adjustment
East Central Electric includes on its electric bills to consumers each month a charge called the Power Cost Adjustment.
Wholesale power suppliers obtain their electricity from many sources.
Part of the power is produced at hydroelectric dams, and power purchased at this source fluctuates widely with the amount of rainfall.
Most electric power, however, is produced by steam generation plants which use coal, natural gas, and oil as fuels to produce the steam that turns the generators that produce the electric power. The Oklahoma Corporation Commission has developed a Power Cost Adjustment formula; most all the state's 28 Rural Electric Cooperatives and other power utilities are using it.
The adjustment passes on the difference between the actual cost of wholesale power each month and the base cost used in determining rate schedules. The formula charges all consumers equally for increases and decreases in the cost of producing electric power.
The Cooperative's base wholesale power cost used in determining rates is 41 mills per kWh. Billing statements are adjusted each month by the amount the Cooperative's average cost per kWh purchased varies from this amount.
Members can calculate their own Power Cost Adjustment each month by multiplying the "factor" (indicated as Power Cost Adjustment on the electric bill) by kWh used for the billing period. This "factor" changes each month, depending on the average price paid to wholesale power suppliers.