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PRECorp makes cost of power adjustments


November 5, 2020

Powder River Energy (PRECorp) has requested permission from the Public Service Commission to increase its Cost of Power Adjustment (COPA) by $3876 per annum, effective on January 1, to reflect a change in wholesale power costs. This would lead to a modest reduction on residential monthly bills.

In a second filing, the cooperative has also asked to adjust the amount it pays members who generate small amounts of electricity themselves.

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 will see an average reduction of 31 cents per month.

PRECorp’s second application would revise the Small Power Production rate tariff, also effective on January 1. This applies to residential and commercial customers who install facilities for generating electric power.

The Public Utility Regulatory Policies Act of 1978 requires that PRECorp purchases all the kilowatt hours generated by these qualifying facilities at its avoided cost (which is defined as the incremental cost of generating or purchasing electric energy or capacity, or both, in an amount equal to that purchased from a qualifying facility). As PRECorp’s avoided cost is based on the avoided cost published by Basin Electric (adjusted for losses), the cooperative’s request is based on what Basin has estimated for 2021.

If approved, the amount PRECorp is paying these customers through its Small Power Production rate would increase from $0.01337 to $0.014694.

Statements, comments, protests or interventions on either case must be filed in writing with the Public Service Commission before November 25.


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