Vol73-2 February 2023

Power Cost Adjustment tracker

The typical residential SMECO bill is divided into three main portions: Standard Offer Service (SOS); Distribution Service; and Regulatory, State, and Local Taxes.

SOS charge: Energy supply charges on your electric bill.
The SOS rate is the cost of energy and reflects the price SMECO pays on the wholesale market with no mark-up by your cooperative.

Distribution Service charge: Delivery charges on your electric bill.
This charge covers the cost of delivering the energy supply to your home or business, including facilities, equipment, and personnel.

Regulatory, State, and Local Taxes.
Regulatory fees and taxes as set by the local, state, and federal government.

The SOS has two parts: the Energy Charge and the Power Cost Adjustment (PCA). The residential energy charge is a flat rate set to cover the cost of energy purchased. While this rate is stable on your bill, the wholesale market is constantly shifting. SMECO’s PCA is in place to even out the impact of fluctuating energy prices on customer bills. 

When SMECO’s PCA hits a trigger of more than 5 percent (up or down) of the residential energy charge for three months in a row, SMECO files to adjust the energy charge to absorb the overage reflected in the PCA and bring the stable price closer to the actual price of power. Your cooperative evaluates the impact of the PCA on the existing energy charge and forecasts rate trends to determine the price for the adjusted rate when filing. A new tracking cycle begins once the adjusted rate goes into effect. 

SMECO works hard to negotiate the best pricing possible but commodity pricing has increased significantly in the past year and a half and this has impacted member bills as the cost of energy increased. In an effort to keep our members informed, we are including our PCA tracker in your monthly newsletter. You can also find more detailed information about your rates at smeco.coop/rates-fees. 

Learn more about how to read your SMECO bill.