Understanding the Purchase Power Cost Adjustment (PPCA)

Understanding the Purchase Power Cost Adjustment (PPCA)
Bandera Electric Cooperative is a not-for-profit electric utility. We’re committed to delivering reliable, cost-effective power to our consumer-members.

BEC purchases electricity each month from our power supplier, Lower Colorado River Authority (LCRA), at a wholesale cost to meet the needs of our members. The cost of wholesale power is a significant expense of providing electric service to the homes and businesses we locally serve.

What is the PPCA?
You may have noticed the Purchase Power Cost Adjustment (PPCA) line item on your monthly bill. The PPCA provides a monthly adjustment dependent on any differences in the base cost of wholesale power.
 
If the kilowatt-hour cost to BEC is lower than the base cost of power, the PPCA is applied as a credit on your bill. If the kilowatt-hour cost is higher than the base cost of power, the PPCA is applied as a charge. Having the PPCA benefits members by covering monthly power cost fluctuations without having to continually restructure electricity rates.
 
What impacts the PPCA?
The PPCA changes based on the cost of wholesale power, which fluctuates for a variety of reasons. During hot summer months when the demand for electricity is much higher, power may need to be purchased from more expensive sources at market price, which includes additional generation costs. Increased costs for fuels like natural gas also impact the price of wholesale power.
 
What month will the PPCA line item be implemented?
Members will begin to see the PPCA charge on the monthly energy bill beginning in January 2024.
 
How often is the PPCA adjusted?
The PPCA is reviewed and adjusted on a quarterly basis.
 
Why hasn’t the PPCA been on my bill?
You may be wondering why the PPCA is now appearing on your bill. Previously, BEC absorbed the higher cost of purchasing wholesale power to avoid passing the cost on to our members.
 
What happens if BEC does not implement the PPCA to members?
If BEC continues to absorb the higher cost, it will most likely result in the possibility of annual rate changes.
 
What is BEC doing to help?
We know times are tough as the cost of gasoline, groceries and other essential needs are rising. BEC is doing everything possible to keep internal costs low.
 
We offer a variety of programs and services to help members save on their energy bills including our Energy Saver program, solar power and energy saving billing options like time-based usage and budget billing.
 
We’re here to help. Contact us if you have questions about your bill or ways to save energy.