PCRF Explained

What is the Power Cost Recovery Factor (PCRF)?

The Power Cost Recovery Factor (PCRF) is an adjustment used by Fannin Electric Cooperative (Fannin EC) to recover the cost of the electricity we purchase from our suppliers. This factor allows us to adjust your monthly electric bill to reflect changes in the cost of power. Simply put, it ensures that we can recover the fluctuating costs of electricity, without needing to adjust our base rates each time the cost of power rises or falls.

Why is PCRF Necessary for Fannin Electric Cooperative?

The cost Fannin EC pays for electricity can change for various reasons, including:

  • Changes in fuel prices (e.g., coal, natural gas)
  • Shifts in market conditions or energy regulations
  • Weather-related demand surges (during hot summers or cold winters)
  • Emergencies or supply shortages

Without a mechanism like the PCRF, these price changes could impact the cooperative’s ability to provide reliable service. The PCRF helps us pass on these changes fairly to members.

How Does the PCRF Work at Fannin Electric Cooperative?

The PCRF is an adjustment to your monthly bill. It can either increase or decrease depending on the cost of electricity Fannin EC purchases from its suppliers. Here’s how it works:

  • Cost Monitoring: We closely track the cost of power Fannin EC purchases from suppliers.
  • Adjustments: If the cost of power increases, the PCRF will rise. If the cost decreases, the PCRF will go down.
  • Communication: Any changes to the PCRF are clearly shown on your monthly bill, so you’ll know how it affects your bill.

How Does the PCRF Affect My Fannin Electric Cooperative Bill?

The PCRF is added to or subtracted from your monthly bill, based on the change in the cost of power:

  • If the PCRF increases: Your total bill will be higher.
  • If the PCRF decreases: Your total bill may be lower.

The adjustment amount will depend on your electricity consumption and the PCRF change during the period.

Is the PCRF Fixed or Can It Change?

The PCRF is not fixed—it can change as needed. Fannin EC reviews the actual cost of purchasing electricity each month and, if necessary, adjusts the PCRF accordingly. These adjustments ensure we can recover the true cost of power while maintaining financial stability.

How Does the PCRF Benefit Me as a Member of Fannin Electric Cooperative?

  • Fair Pricing: You only pay for the actual cost of power, ensuring you’re not overpaying when costs go down and only paying what’s necessary when costs rise.
  • Financial Stability: The PCRF ensures that FEC remains financially strong and can continue providing reliable service.
  • Transparency: You’ll always be informed about changes to the PCRF by clearly displaying it on your bill.
  • Avoids Constant Rate Increases: Instead of raising base rates constantly, the PCRF allows for gradual adjustments to the cost of electricity.
Have questions or need more information? Contact our Member Services team!