PCA - Power Cost Adjustment
What is PCA?
2025 Customer Notice
Effective January 1, 2025, NOVEC is implementing its annual Power Cost Adjustment (PCA).
NOVEC does not earn a margin (profit) on wholesale power it purchases on behalf of its customers. Instead, changes in wholesale purchased power costs are passed through at cost to customers using the PCA line item on the monthly bill.
The 2025 PCA credit is $0.008 per kilowatt hour (kWh). A NOVEC residential customer using 1,000 kWh per month will see an $8.00 credit on their NOVEC monthly electric bill. For comparison, the 2024 PCA credit was $0.01835 with a monthly bill credit of $18.35.
The 2025 adjustment is driven by cost increases for generation capacity and transmission service that are largely outside of NOVEC’s control. PJM Interconnection is the regional transmission organization that coordinates wholesale electricity in Virginia, 12 other states, and the District of Columbia. PJM faces challenges with electric generation and load growth, so purchased power costs are increasing. Insufficient electric generation resources in the Virginia area of PJM’s territory require power to be brought in from areas with excess generation. That’s driving up capacity market costs. Delivery of this energy to large regional electric loads also is increasing transmission expenses.
Even with the PCA adjustment, NOVEC’s total residential bill remains the lowest or among the lowest in Virginia. As a not-for-profit electric utility, NOVEC’s rates and terms of service are regulated by Virginia’s State Corporation Commission.
PCA FAQs
What is the Power Cost Adjustment (PCA)?
As a not-for-profit cooperative, state law prevents NOVEC from earning a margin (profit) on electricity it purchases for delivery to customers. Instead, the actual cost of purchased power is passed through to customers without any mark-up.
Each fall, the co-op forecasts its energy costs and the amount of energy all of its customers will use the next year. While those forecasts are thoroughly researched, it is not surprising they differ from the actual purchased power costs.
NOVEC is required to reconcile the difference, and the reconciliation occurs through the PCA line item on customers’ monthly bills. The PCA can be a credit or a charge. Periodic changes to NOVEC’s PCA ensure the actual cost of purchased power is recovered without any margin (profit.)
How does NOVEC control its purchased power costs?
To protect against rising power costs, NOVEC locks in fixed prices and quantities for a substantial portion of the electricity customers are forecast to use. Because customers’ energy needs change daily, NOVEC cannot lock-in prices on all of the power it purchases.
