FAQs

What is the Power Cost Adjustment item on my electric bill?

• A Basic Explanation

  The Power Cost Adjustment is a separate line item on each Clay Electric bill statement which reflects the increases/decreases in the co-op's cost of power purchased wholesale from Seminole Electric Cooperative. The fluctuation in the Power Cost Adjustment is largely caused by changes in the cost of fuel for generation.
  
  The co-op's cost of wholesale power is now over 70 percent of Clay's total expenses so it's critical that the co-op makes sure that it recovers all of its wholesale power costs in its retail sales. The cost is collected from the co-op's members through the energy charge and the Power Cost Adjustment.

• A portion of the co-op's cost of power is already included in the energy rate (commonly referred to as the base rate).

  Presently 5.445 cents per kWh is included in the base rate for the cost of wholesale power. When the cost of power is greater than the amount included in the base rate, the Power Cost Adjustment is a charge. When the cost is less, the Power Cost Adjustment is a credit. Clay Electric had a Power Cost Adjustment credit from 1996 until 2000. In more recent years, the cost of fuel used to generate the power we buy has exceeded the amount in the base rate. Therefore, the Power Cost Adjustment has been a charge.

• Computing the Power Cost Adjustment .

  Each month's Power Cost Adjustment is established on the first billing day after management's review of Seminole's latest billing and projected power costs for the month.
  
  The Power Cost Adjustment on an electric bill statement is computed by multiplying the amount charged or credited by the number of kilowatt hours used. For example, if the amount charged is .02780 and 1000 kWh was used during the billing period, the Power Cost Adjustment would be a charge of $27.80.

• Authorized by the Florida Public Service Commission.

  Power Cost Adjustments have been authorized by the Florida Public Service Commission since the 1973 Arab Oil Embargo to reflect changing fuel and wholesale power prices. Without Power Cost Adjustments, a utility's base rates would be constantly changing to reflect increases and decreases in the cost of power.