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Covington reducing PCA on electric bills

Photo by Howard Reed

Photo by Howard Reed

COVINGTON -- City of Covington electricity customers will see a lower power cost adjustment on their utility bills beginning next month. That could translate to lower bills for some, depending on usage.

The PCA, or power cost adjustment, is dropping from 19.7 mills to 14.7 mills, or about half a cent, starting in February.

"This is a reduction in the PCA, not electric rates ... It's hard to say if somebody's bill is going to be lower," said City Manager Steve Horton, adding that will depend on how much electricity they use.

The PCA is how the city passes along the cost to purchase power to its customers rather than constantly changing rates. The PCA increases or decreases depending on the market, so customers aren't locked in, as they would be with a rate change. The current PCA is 1.97 cents per kilowatt hour. It will reduce to 1.47 cents per kilowatt hour, a rate that should remain in place at least through June, unless something happens to affect market costs.

In December, the council agreed not to pass along to customers an increase in cost for power purchased from the Municipal Electric Authority of Georgia in 2011. Covington will pay an additional $2.6 million for electricity in 2011, an increase of about 6.9 percent, for a total of about $31.1 million. At the recommendation of Horton, the City Council agreed to cover the increase by transferring $2.3 million from the New Generation Fund, which is typically used to pay for future energy-related costs, such as interest payments on the new Plant Vogtle. Had the council not agreed to apply the MEAG credit, the PCA would have increased to 2.47 cents per kilowatt hour.

"Everybody's cost will be lower than anticipated. It may not be lower than it is today, but it will be lower than anticipated," Horton said. "It's got to be lower than it would have been if we hadn't taken the $2.3 million out of the MEAG account."

The MEAG credit will be distributed yearly to the city for the next six years. "It's a council decision, but it will be my proposal to continue to apply it to utility bills so long as we're in the economic condition we're in," Horton said.