POWER COST ADJUSTMENT

The power cost adjustment is the rate component that is a direct reflection of the fluctuating costs required to run an electric plant.  The power cost adjustment is to recover the total cost of power supply, including losses, that are not included in the base rate structure.

The total cost of power supply is defined as the sum of the fixed and variable costs of power. That includes fuel cost increases, transmission grid congestion charges, increase in wholesale energy costs, maintenance of plant generation and equipment, and MISO charges to mention a few.

Approximately 55% of the wholesale power that we purchase is generated by Xcel Energy and 45% is purchased on the open energy market.

When the total cost of power supply increases, the cost is passed through to Delano Municipal Utilities and ultimately to its customers in a power cost adjustment.  So while Delano Municipal Utilities’ rate for the price of electricity has not changed, customers are paying more with a power cost adjustment.

Rising prices affect the majority of utilities though out the country and is reflected in their power cost adjustments.        

To help keep costs down, the Utility encourages all customers to conserve energy wherever they can.

Delano Municipal Utilities is aggressively exploring all available energy options in an effort to secure a more attractive wholesale product.