JCREMC Power Cost Adjustments

I. PURPOSE

This Appendix establishes the methodology used to determine the quarterly Power Cost Adjustment (“PCA”). The PCA will also include a distribution cost recovery component as defined and outlined below.  The PCA is applicable to retail electric service provided by the Cooperative.

The purpose of the PCA mechanism is to provide timely recovery or refund of:

1. Variations in wholesale power supply and transmission costs.
2. Distributed Energy Resource (“DER”) operation and maintenance costs.
3. Severe storm restoration costs.
4. Distribution-related cash flow adjustments approved by the Board of Directors.

The PCA mechanism is intended to maintain financial stability while minimizing the need for frequent base rate adjustments. The rate adjustments shall apply to all rate schedules unless specifically exempted by the Cooperative’s tariff or by action of the Board of Directors.

II. CALCULATION PERIOD

The PCA shall be calculated quarterly based upon actual financial results from the preceding calendar quarter.

Quarterly periods shall be:

Quarter 1: January through March
Quarter 2: April through June
Quarter 3: July through September
Quarter 4: October through December

The resulting PCA adjustment ($/kWh) shall become effective on the first billing cycle of the subsequent quarter and will be identified on the member’s bill as “Power Cost Adjustment”.

III. POWER COST ADJUSTMENT (PCA)

A. Recoverable Power Costs may include:

• Purchased power expense
•  Transmission service expense
•  Capacity charges
•  Energy market purchases and settlements
•  Ancillary service charges
•  Generation fuel costs
•  Costs associated with Cooperative-owned generation resources
•  Renewable energy credit costs or revenues
•  Other Board-approved wholesale power supply expenses

B. Distribution cost categories eligible for recovery shall include:

• Unbudgeted or unexpected maintenance costs for distributed energy resources to include but not limited to solar generation facilities and battery energy storage systems.
• Extraordinary severe storm restoration costs (net of any reimbursements from insurance and Federal or State disaster assistance).
• Distribution cash flow adjustments (positive or negative) authorized by the Board of Directors to maintain reasonable cash operating reserves and working capital.

C. Definitions and Calculation:

1. Base Power Cost (B) – The level of power supply cost embedded in the Cooperative’s base retail rates, expressed as a cost per kilowatt-hour (kWh).
2. Actual Power Cost (A) – The actual cost incurred by the Cooperative for purchased power, transmission service, generation operations, fuel, market purchases, renewable energy credits, and other Board-approved wholesale power supply expenses.
3. Distribution cost component (C) – Actual costs incurred, plus or minus authorized cash flow adjustments, less distribution costs previously collected via the PCA.
4. PCA Rate (D) – The cumulative difference between Actual Power Costs and Base Power Costs recovered through retail rates plus or minus the distribution component, and divided by expected future sales.
   • A positive balance represents under-recovery of costs and shall be collected from members through the PCA rate.
   • A negative balance represents over-recovery of costs and shall be refunded to members through the PCA rate.
5. Calculation of PCA Rate
   1. Calculate the net variable cost difference (D = A – B ± C)
   2. Account for remaining balance carried forward (Adjusted Cost = D ± Cumulative Balance)
   3. Divide by Expected Future Sales (PCA Rate = Adjusted Cost/Forecasted Sales)

Rate Adjustments

JCREMC POWER COST ADJUSTMENT

The Power Cost Adjustment approved by the Board of Directors to become effective for the period beginning October 1, 2026 is $0.0000 per kWh used per month.