As energy costs fluctuate, the PCA is a way to reflect changes in the cost of power without completely restructuring the City’s existing rate schedules. The concept is that as the cost of purchasing electricity changes, the retail charge for electricity should change accordingly.
One way to think about PCA is to compare it to the cost of gasoline for your car. Even though your monthly car payment hasn’t gone up, the car you drive is costing more to operate now because just as electricity prices have risen, so have gasoline prices at the pump (the PCA). The PCA is a pass-through charge that is unknown from one month to another just as gasoline prices are unknown from month to month.