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’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.
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.
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.
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.
