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June 2012
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PCA rate cost for Paducah Power to drop

BY DAVID ZOELLER dzoeller@paducahsun.com

Paducah Power System officials have decided to lower the utility's Power Cost Adjustment â “ a variable cost added to the base rate designed to offset the cost of buying wholesale power â “ by nearly 40 percent, or 1.42 cents per kilowatt hour, beginning July 1.

That's the good news. The bad news is that the rate paid by Paducah Power customers will still be higher than the rates in other western Kentucky towns. The new combined rate starting in July will be 13.303 cents per kilowatt hour, compared to the current rate of 14.723.

The PCA is a billing practice used by many utilities to make sure they are collecting enough to cover wholesale power costs without changing the base rate every month. Paducah Power's base residential electric rate remains at 11.153 cents per kilowatt hour.

Paducah Power's PCA is normally reviewed and adjusted quarterly, based upon the utility's power costs in the previous months and projected power costs for the upcoming quarter.

The PCA is tied directly to the operating performance of the two 800-megawatt generators of the Illinois-based Prairie State Energy Campus, Paducah Power's main supplier. Thursday's announcement of the lower PCA came on the same day Prairie State's Unit 2 was to be back online after an accident took it out of service on May 24.

According to Andrea Underwood, Paducah Power director of community relations, Unit 2 was in startup mode Thursday and scheduled to be operating by midnight.

In February, Paducah Power's PCA rose sharply to 3.59 cents per kilowatt hour. The jump was attributed to lower-than-expected output from Prairie State due to mechanical problems during its shakedown phase, according to Dave Clark, Paducah Power general manager. The PCA was lowered May 1 to 3.57 cents per kilowatt hour. That rate was scheduled to remain until Aug. 1, but the Paducah Power board of directors decided to move up the recalculation based on new power cost information for May and updated projections for the next few months.

"We know the high PCA in the past five months has been painful for our residential and business customers, especially during the really cold months," said Clark. "We are doing everything we can to get the Prairie State plant operating like it's supposed to." Clark said Paducah Power, while not abandoning the quarterly review process, will look at the PCA monthly for at least the next couple of months, as summer heat and demand rise. 

"We're going to follow our formula (quarterly review), but keep in mind our customers," Clark said. "They need relief now."

Contact David Zoeller, a Paducah Sun staff writer, at 270-575-8676.

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