Purchased Power Adjustment (PPA)
A Message to Our Customers
Western Carolina Power is your local public power utility. We live here, we work here, and we serve this community directly.
WCP does not generate electricity. We purchase wholesale power under a long-term agreement and deliver it to homes and businesses through our local electric system. The Purchased Power Adjustment (PPA) is simply the mechanism that reflects what we actually pay for that wholesale electricity.
We do not profit from the PPA. It is a direct pass-through of costs, with no markup or added margin.
Our responsibility is to recover the actual cost of power while maintaining a safe, reliable, and financially stable electric system for Cullowhee and the surrounding community.
Frequently Asked Questions
Why does WCP adjust the PPA each year?
Wholesale power costs change annually. Instead of filing a full rate case every year, WCP performs an annual true-up to compare:
- What was collected from customers
- What WCP actually paid for wholesale power
- What is forecast for the coming year
If costs exceed projections, the PPA is adjusted upward. If costs were lower, the PPA would be adjusted downward.
This annual true-up keeps the process transparent and prevents long-term over- or under-collection.
Why did the PPA increase this year?
The increase reflects:
- Higher natural gas prices
- Updated wholesale power market forecasts
- The annual true-up of prior year costs
WCP does not control wholesale fuel prices.
Does WCP make money from this adjustment?
No. WCP is a not-for-profit public power utility. The PPA is a direct pass-through of wholesale costs.
Why can’t WCP absorb these increases?
Wholesale power is WCP’s largest operating expense. Absorbing those costs would reduce operating reserves and jeopardize long-term financial stability. As a cost-of-service utility, WCP must recover the actual cost of providing electric service.
Why doesn’t WCP have a rate stabilization fund?
The North Carolina Utilities Commission (NCUC) has not allowed WCP to implement a rate stabilization fund or a formal levelized billing mechanism that some non-regulated utilities use.
WCP must pay wholesale power invoices when they are due, while customers repay those costs over a 12-month billing cycle. This timing difference can create cash-flow pressure during periods of higher costs. WCP continues to pursue regulatory tools to better smooth cost volatility.
Is this related to infrastructure or staffing costs?
No. This adjustment only reflects wholesale power costs. Base facility charges and other fees remain unchanged unless separately approved.
Do all customers see the same impact?
No. Bill impacts vary depending on:
- How much electricity a customer uses
- When electricity is used (peak vs. off-peak periods)
- Load characteristics for commercial accounts
Will rates continue to increase?
The PPA may increase or decrease in future years depending on wholesale market conditions. Last year, WCP decreased the PPA following lower costs.
Does this affect reliability?
No. The PPA ensures continued access to reliable wholesale generation while WCP maintains and operates the local electric distribution system.
What is WCP doing to manage costs?
WCP continues to:
- Monitor wholesale markets
- Manage peak demand
- Invest in infrastructure reliability
- Provide energy efficiency education
- Plan long-term for system stability
Is financial assistance available?
Customers experiencing financial hardship are encouraged to contact WCP customer service. Assistance programs and payment arrangements may be available.