What Is a Power Cost Adjustment? Quick Answer
A power cost adjustment (PCA) is a separate line on your electric bill. It is a charge when the city pays more for wholesale electricity than its base rates assume, and a credit when it pays less. On September 3, 2026, the St. George City Council voted 5-0 to add one to every St. George Energy Services bill as part of Resolution 2026-018R.
So will it raise your bill? Not right now, if the city's own numbers hold. The city ran the formula on its past 12 months of power costs. For a home using 800 kilowatt-hours (kWh) a month, the PCA would have been a credit every month from September 2025 through August 2026, growing from 34 cents to $4.10. The city also projected credits of about $4 for September and October 2026. That can flip, though. When wholesale power gets expensive, the same line becomes a charge, and nobody on the council has to vote on it.
| Question | Answer |
|---|---|
| Who it applies to | All St. George city electric customers, residential and commercial |
| Approved | September 3, 2026, 5-0 (Resolution 2026-018R) |
| Charge or credit? | Either one. It depends on actual wholesale costs compared with the cost built into base rates |
| How often it changes | Recalculated monthly, based on a 12-month rolling average |
| Needs a council vote to change? | No. Each month's factor takes effect automatically |
| City's look-back (800 kWh home) | Credits of $0.34 to $4.10 a month, Sept. 2025 to Aug. 2026 |
How a Power Cost Adjustment Works
An electric utility has two kinds of costs. Some it controls, like crews, poles, trucks, billing and debt. The other is the price of the electricity it buys on the wholesale market, which it doesn't control. St. George sets its base rates once a year for its budget, using a forecast of what wholesale power will cost. The city's presentation to the council put the problem this way: "market conditions and extreme weather events can cause actual costs to differ from budgeted amounts."
Without a PCA, the city has two options when that forecast misses. It can absorb the difference out of reserves, or it can come back and raise base rates. A PCA settles the difference every month on its own, in either direction.
The city's rider spells out the math:
- Actual cost. Take the net wholesale power cost for the most recent 12 closed billing months, minus credits from selling surplus power, and divide it by the kWh billed to customers over the same 12 months. That gives a cost per kWh.
- Budgeted cost. This is the wholesale power cost per kWh already built into current base rates.
- The difference. If actual cost is higher, the PCA factor is positive and becomes a charge. If it's lower, the factor is negative and becomes a credit.
- Smoothing. The factor on your bill is a rolling average of the last 12 monthly factors. The city says this is meant "to decrease any dramatic spikes from extreme events."
- Lag. Bills use data that is about two months old, so the city works from closed, reconciled numbers instead of forecasts.
The factor is a price per kWh, rounded to a thousandth of a cent, multiplied by how much power you used that month. A house that runs its air conditioning hard in July gets a bigger credit, or a bigger charge, than a small apartment in April.
What counts as a "power cost"
The rider limits the PCA to wholesale supply costs: energy, capacity, transmission, ancillary services, variable fuel and operating costs, hedge settlements, and market and compliance costs tied to power supply, minus credits from surplus sales. It excludes distribution maintenance, customer service, general overhead, capital projects, depreciation and interest. In other words, the PCA isn't supposed to pay for new substations or city salaries. Those still go through base rates and the annual budget.
What It Could Mean for Your Electric Bill
The council packet included a table showing what the PCA would have been for a customer using 800 kWh a month. Every month was a credit:
| Month | PCA factor (per kWh) | 800 kWh home |
|---|---|---|
| Sep 2025 | -$0.00043 | $0.34 credit |
| Oct 2025 | -$0.00081 | $0.64 credit |
| Nov 2025 | -$0.00172 | $1.38 credit |
| Dec 2025 | -$0.00190 | $1.52 credit |
| Jan 2026 | -$0.00183 | $1.47 credit |
| Feb 2026 | -$0.00299 | $2.39 credit |
| Mar 2026 | -$0.00351 | $2.81 credit |
| Apr 2026 | -$0.00280 | $2.24 credit |
| May 2026 | -$0.00353 | $2.82 credit |
| Jun 2026 | -$0.00398 | $3.18 credit |
| Jul 2026 | -$0.00373 | $2.98 credit |
| Aug 2026 | -$0.00512 | $4.10 credit |
| Sep 2026 (projected) | -$0.00517 | $4.13 credit |
| Oct 2026 (projected) | -$0.00503 | $4.02 credit |
Source: City of St. George, September 3, 2026 council agenda packet. The city labeled the September and October 2026 figures as illustrative projections, not actual results, as of August 21, 2026.
To put that in context, here are the residential rates listed in the same resolution. There's a $26 monthly customer charge, 7.7582 cents per kWh for the first 800 kWh, and 10.712 cents per kWh above that. At those rates, 800 kWh comes to about $88 before the PCA, so a $4 credit is a bit under 5% off.
Your number will be different. Multiply the PCA factor printed on your bill by the kWh you used. For example, a home using 1,500 kWh in a summer month at the projected October factor would see about a $7.55 credit (1,500 × $0.00503). The same factor running the other way, as a charge, would add the same $7.55.
When it turns into a charge
The credits above mean wholesale power has recently cost St. George less than its base rates assume. The policy is built for the opposite case too. The city's materials say that when power supply costs run over budget, "the cost is passed to customers," with no new rate vote needed.
The city pointed to one example. Its May 2026 presentation said that if a PCA had been in place during what it called an extreme market event in 2022, the city would have recovered those costs in about 14 months. In practice that would have meant a PCA charge on bills for over a year. It's the clearest sign in the city's own documents that this line can go up as well as down.
Why St. George Added a PCA Now
The city tied the PCA to its credit rating. The staff report says the PCA "was developed based on industry best practices in response to the City's 2025 credit rating review." The city's presentation says it was "heavily recommended by S&P." It listed what could happen if the city did nothing: "Likely that our Bond Rating will stay downgraded," a possible downgrade to the outlook, and "higher costs for borrowing money."
The city's argument is that public power utilities often put off rate changes, which leaves them exposed when wholesale prices spike. A PCA recovers those costs automatically, so the utility doesn't draw down reserves while waiting for a rate case. Better credit can mean cheaper borrowing for the electric system.
The staff report also says a PCA "is currently in place for the majority of utilities in Washington County." The city's presentation names Dixie Power, Washington City, Santa Clara, Rocky Mountain Power and Logan City as examples.
What Changes, and What Doesn't
- Your base rates don't change because of this vote. The PCA sits on top of them as its own line.
- It moves monthly without a council vote. The Energy Services Director calculates the factor each month and files a certificate with the Finance Director before it takes effect. The rider calls for the certificate to be posted publicly.
- It's averaged over 12 months. A single bad month on the wholesale market shows up gradually instead of all at once.
- It isn't limited to charges. Credits flow back to customers under the same formula. The city's look-back shows credits for every month.
The council's September 3 discussion with Energy Services Director Bryan Dial is on the city's meeting video, starting at about 19:39. The minutes link to it.
Frequently Asked Questions
What is a power cost adjustment on my St. George electric bill?
It's a separate line that adds a charge or a credit based on whether the city's actual wholesale power costs, averaged over the past 12 months, are higher or lower than the power cost built into base electric rates. The St. George City Council approved it on September 3, 2026.
Will the power cost adjustment raise my electric bill?
It can, but it wouldn't have recently. The city's look-back for an 800 kWh home shows a credit every month from September 2025 through August 2026, ranging from $0.34 to $4.10. If wholesale power costs rise above what's built into base rates, the line becomes a charge.
Does the city council have to vote every time the PCA changes?
No. The PCA rider says each month's factor "becomes effective automatically without further legislative action." The Energy Services Director files a monthly PCA certificate with the city Finance Director.
Why did St. George adopt a power cost adjustment?
The city says it responds to its 2025 credit rating review and was recommended by S&P. Without it, the city warned, its bond rating would likely stay downgraded and borrowing could cost more.
Does this apply if I'm a Dixie Power customer?
No. This PCA applies to St. George Energy Services, the city-owned electric utility. Dixie Power serves other parts of the area and sets its own rates. St. George's presentation lists Dixie Power among the utilities that already have a PCA.
Sources: City of St. George, September 3, 2026 City Council agenda packet (staff report, Resolution 2026-018R and Exhibit A, PCA Rider, PCA overview, and May 5, 2026 work meeting presentation); St. George City Council minutes, September 3, 2026 (5-0 roll call vote). Both are posted on the Utah Public Notice Website.
