Fairview passes power cost adjustment ordinance

The PCA is an amount displayed on the consumer’s electrical bill. It can be a positive or negative number, and the amount affects what you pay. If the number is positive, there is an additional charge to your electrical bill. If the amount is negative, that becomes an electrical credit, and is usually subtracted from your bill.

FAIRVIEW—A tense atmosphere dominated a Fairview City Council public hearing on a PCA (power cost adjustment) ordinance, a discussion that has been long in the making. The hearing took place during Fairview’s last city council meeting on March 18.

In September, 2022, the Lila Canyon in mine, a mine that provided around 28% of Utah’s coal, caught fire. This left a massive gap in availability of coal to run power plants statewide and left cities scrambling.

Large urban areas, such as St. George, were losing up to $2 million dollars per month because of the increased power cost. Fairview City was no exception, with the city council having to pull funds from non-power departments to make ends meet. This is where the proposed PCA comes in.

The PCA is an amount displayed on the consumer’s electrical bill. It can be a positive or negative number, and the amount affects what you pay. If the number is positive, there is an additional charge to your electrical bill. If the amount is negative, that becomes an electrical credit, and is usually subtracted from your bill.

The city council has proposed a PCA to assist in the case of another utility emergency, such as happened at Lila Canyon. In such cases, smaller towns tend to suffer because of a lack of stockpiled funds. Because these towns have much less income than larger urban areas, this can become a problem that snowballs quickly.

Sadly, a PCA is not a magic solution that will solve all electrical crises, and the city council knows this. The council agreed that a PCA was necessary, but the issue of implementation is what made for a tense conversation. Implemented incorrectly, citizens’ bills take a massive increase.

With Brad Welch leading the discussion, Councilman Casey Anderson providing insight and Councilman Jim Cheney expressing skepticism, the council moved closer to the solution. 

Here is what the council proposed as a potential solution that would prevent large increases in residents’ power bills: The default state of the PCA is $0 (indicating that if the revenues are in line with the budget, there will be no change to citizen’s bills).

In the case of a deficit in the city’s electrical account (usually because of electrical emergency), a set of checks go into action. It is required that Power Department rates have been updated in the past 12 months, that the Power Department budget is in the negative three months after adjustments have been made, and the city council votes in a city council meeting to institute the PCA.

If all of these requirements are met, the PCA is imposed. The amount is determined by an equation based on the electrical deficit. This amount is required to be discussed and recalculated every month at council meetings, and because of the nature of the equation, it will inevitably go down.

If the city ends up being overpaid because of the PCA, the equation leaves room to calculate a credit on customer bills. With this equation, it is not possible for the city to stockpile or use PCA money for its own purposes. This set of safeguards is designed to create an outcome that is satisfactory for residents.

Before the discussion was over, Mayor Welch brought up one more concern. “Should citizens on the [city’s] assistance program be exempt from the PCA cost?” The council agreed that individuals on the assistance program will not be exempt from adjusted cost increase.

“I don’t like it, but I am not necessarily opposed,” Councilman Cheney said. He and Councilwoman Shirlene Rasmussen abstained, while the rest of the city council voted in favor of the PCA plan. No council member was opposed, and there was no public comment.