Beginning June 1, 2026, members will see about a 1.4¢ per kWh increase in the Power Cost Adjustment (PCA) to recover the higher cost of electricity that needed to be purchased from the market early this year. A cold spell in January and February revealed serious challenges in the regional electricity market that supplies our cooperative. A flawed market design allowed electricity suppliers to charge prices significantly above what it cost them to generate the electricity. The financial impact from the electricity purchased during that cold spell will be reflected in this PCA adjustment on member bills.
Below, we’ve provided information to help explain why usage increased, how these conditions have affected both members and the Cooperative, and what steps are being taken to manage and control costs.
Why is the PCA Increasing?
The Power Supply Chain
- Wholesale electricity prices spiked dramatically during late January and early February, reaching up to 30 times higher than normal for short periods. The extra electricity needed for just two weeks cost $14 million more than was forecasted based on historical usage data and weather patterns.
- These price spikes were not caused by worse weather or dramatically higher demand compared to last year.
- Market design flaws and limited available generation allowed suppliers to charge prices far above the actual cost of producing electricity.
What This Means for Members Now
- CVEC had to purchase additional electricity during the two-week cold snap. CVEC purchases the majority of electricity ahead of time using a portfolio approach that is based on historical member usage and weather patterns. Buying electricity ahead of time allows us to take advantage of competitive pricing. When members use more energy than was forecasted and purchased in advance, CVEC must buy that electricity from the market at substantially higher prices.
- By law, CVEC must recover the full cost of electricity purchased on behalf of members at no profit and no loss.
- As a result, the Power Cost Adjustment (PCA) on member bills will increase approximately 1.4¢ per kWh beginning June 1, 2026.
What This Means for Members Going Forward
- Electricity demand in the PJM region (all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia) is expected to keep growing due to electrification and data center development.
- Without changes to market rules or more generation being built, price volatility is likely to continue.
CVEC is taking several steps that will help us control rising power costs and allow us to avoid purchasing power when costs are highest.
CVEC is continuing to develop voluntary load management programs and advocate for fair pricing at local and state levels. We are pursuing locally sourced energy from renewable and gas sources helps to reduce transmission costs. Construction is in the final stages on the 8MW Midway solar project in Albemarle county that is connected directly to our system to bypass PJM’s transmission fees. The new solar array is scheduled to come online in May 2026 and will bring our total solar capacity to 23MW. In addition, CVEC is adding 13MW of battery storage to our system that can be discharged during peak times to reduce costs. The battery storage is expected to be operational by the end of 2026.
Through our strategic planning efforts, CVEC is exploring expanded system voltage control systems, peak management options, internal peak-use reduction programs, peak management rates, and other grid-connected peaking generation resources.
CVEC’s rates are structured to recover power supply purchases based on a specific average cost. When the actual cost of purchasing power fluctuates, CVEC must adjust the Power Cost Adjustment (PCA). This ensures that the cost of purchasing power for CVEC members is fully recovered through the rates. The PCA is increased when power costs are higher.
When power costs are lower, the PCA is decreased and reflected as a credit on member bills.
Effective June 1, 2026, the Power Cost Adjustment (PCA) line on bills will increase by about 1.4¢ per kWh to recover the increase in purchased power costs incurred in late January and early February. We purchase power from multiple suppliers to help protect you from price volatility. As older power contracts expire, we are actively securing new energy sources that offer the best value for our members. However, today’s market prices are significantly higher, which affect overall power costs.
The PCA increase is due to higher market prices along with rising power costs from our regional grid operator, PJM. CVEC passes the power costs through without a markup, so 100% of the PCA increase is used to purchase the power that we deliver to our members.
We know every dollar counts, and we’re dedicated to navigating these cost increases responsibly for the members we serve.
In recent years, PJM costs such as capacity and transmission services have risen significantly. Capacity is how much electricity generation is available to meet the PJM regional demand during all hours. Recent significant growth in demand has driven capacity market auction prices higher, adding millions of dollars to CVEC’s power costs. The most recent auction resulted in capacity costs increasing nearly 10 times at CVEC substations served by AEP transmission system and 15 times for substations served by Dominion’s transmission system. In addition, older power contracts are beginning to expire.
A cold spell in January and February revealed serious challenges in the regional electricity market that supplies our cooperative. A flawed market design allowed electricity suppliers to charge prices significantly above what it cost them to generate the electricity.
CVEC is actively securing new energy sources that offer the best value for our members. However, today's market prices are significantly higher.
In addition to securing electricity to meet the requirements of our members, CVEC must also pay for services from PJM, the Regional Transmission Operator. PJM coordinates the flow of electricity across the high-voltage, long-distance electric lines in our region and develops market and reliability rules so that the wholesale electricity transmission system operates reliably and safely.
The PCA is a separate line on your bill that reflects the actual cost we pay to purchase electricity. Because power market prices fluctuate, the PCA ensures those costs are passed through dollar-for-dollar, with no markup, to our member-owners.
The chart below shows years where the PCA has increased because power costs were higher than expected and years where the PCA decreased because power costs were lower than expected. Despite the fluctuations, power costs have been trending higher over the last decade.
CVEC independently purchases all power requirements for our members using a portfolio approach. This approach creates a power supply that is diverse in fuel, supplier, and delivery, and is stable and competitive. CVEC’s portfolio includes contracted energy from a gas-fired generation facility, hydrogeneration, solar generation connected to CVEC grid, and energy blocks purchased from a variety of suppliers.
Planning Ahead: Taking Control of Rising Power Costs
CVEC is working diligently to control power supply costs and we offer several programs and services to help you reduce energy usage and lower electricity bills. Let’s work together to find the right option for you.
- Understand What is Drawing the Most Energy – Perform a breaker check to see where your kilowatts are being used.
- Turning the thermostat up a few degrees in the summer and properly maintaining your cooling system will help reduce energy consumption when temperatures are hottest. Heating and cooling costs make up roughly half of your energy consumption.
- Energy Efficiency Resources – As power costs and demand on the energy grid continue to rise, it is more important that ever to manage your energy usage. Even the smallest changes, such as switching to LED lighting can make a difference. Consider other energy efficiency resources to help reduce your monthly usage and help offset the increase in power supply costs.
- Monitor Your Energy Usage – The best way to manage your energy usage is to monitor it. Sign up for Usage Alerts to track your daily energy consumption.
- Reducing overall energy usage during peak times, which are usually from 6am-10am and 4pm-8pm, will reduce the amount of electricity CVEC must purchase at higher prices. Peak times are hours of the day when the most people are using electricity at the same time. Because demand is higher, electricity costs more during these hours. Follow us on Facebook and make sure your correct email address is on file to receive peak alerts.
- Levelized Billing – Sign up for Levelized Budget Billing Program. With this program, your monthly bill is calculated based on a rolling average of your electricity usage for the current month and the previous 11 months. This way, your payments remain stable, eliminating large fluctuations. Plus, there is no settle-up month, so you can enjoy predictable bills all year long.
- Prepaid Billing – CVEC offers a prepaid billing option that allows members to make smaller, more frequent payments for electricity that you will use later. This flexible payment option allows you to manage your electricity costs in a way that fits your budget and lifestyle. Prepaid billing is one of the best tools to help monitor and manage your energy consumption.
- Sign up for paperless options. Every electric bill and member newsletter printed comes with additional costs, such as printing and postage fees. You can sign up for paperless options here: CVEC Paperless Options
- Pay your bill using automatic bank draft. When you pay with a credit or debit card, CVEC is charged a processing fee. Automatic bank draft is simple, convenient, and doesn’t come with additional fees.
- CVEC’s Solar Share – Through Solar Share, residential members may purchase blocks of solar energy, for a total of 1,000 kWh per household. The cost per 50 kWh block is $4.50. The subscription rate for this solar energy will be locked in until the year 2043. The kWh’s purchased and consumed through Solar Share will not be subject to rate increases or PCA adjustments related to energy costs during that time.
- Assistance Programs – We understand that rising costs can have significant impacts for our members. There are resources available to help eligible members reduce energy costs.
The Co-op Difference When Times Get Tough
We understand that any bill increase is difficult, especially as families and businesses face rising costs in many areas of daily life. We work hard to control expenses and only make adjustments when they are necessary. Unfortunately, some increases are driven by factors outside our control, including rising wholesale power costs and growing demand for electricity. Until additional power generation is brought online and supply better meets demand, energy experts expect prices to remain elevated.
CVEC exists to serve its members, not generate profits. Every dollar collected goes toward the safe, reliable delivery of electricity for our members. While we cannot control wholesale market prices, we are committed to advocating on your behalf, investing wisely, and helping you manage energy costs.
If you are having difficulty paying your electric bill, help may be available. By dialing 2-1-1 or visiting 211virginia.org, you can connect with trained specialists who can help identify local assistance programs and community resources that may be able to help with utility costs and other essential needs.