Pay Your Bill

News Archive

What is PCAC and why is it on my utility bill?

If you’re a customer of Lake Mills Light & Water, your monthly bill most likely includes a line item labeled, “Power Cost Adjustment Clause (PCAC).”  We use the PCAC to pass through to you the actual costs for purchasing your wholesale power. 

The PCAC can increase or decrease monthly depending on variations in weather, customer usage, fuel costs and many other factors.  The PCAC may also be referred to as the fuel cost adjustment or a purchased power adjustment.

The PCAC helps to keep rates as low as possible by ensuring that the utility collects no more and no less than its actual cost for your wholesale power, which typically represents approximately 75 percent of the local utility’s annual operating expense.  The PCAC provides financial stability to the nonprofit utility by making sure it collects revenue sufficient to cover its largest operating expense.  Without the PCAC, local rates would likely need to increase.

The PCAC is one of several factors that impact the customer’s total bill.  Others include:

  • Local utility rate.  These charges reflect the utility’s cost of distributing the electricity customers use through local substations, poles and wires.
  • Individual customer usage.  Your particular usage volume and pattern can significantly impact your total bill or average cost of power.
  • Weather.  Weather impacts heating and cooling load, which has a significant impact on how customers use electricity and the average cost of power.

For a comprehensive understanding, look at your entire bill and familiarize yourself with how energy is being used.

  • To minimize the impact of rising electric costs, identify ways to reduce your electricity usage and to use electricity at a more constant rate throughout the month.
Contact us for additional information about your monthly electric usage and monthly billing statement.