Debt Cost and Power Cost Adjustments explained
Explanation of “Debt Cost Adjustment”
This is used to recover the cooperative’s increase in debt cost since the present rates were designed and approved last. As time passes, new loan funds are required to upgrade the distribution system. These adjustments eliminate the need for expensive rate case hearings every few months. This debt adjustment figure changes quarterly. Changes in these adjustments are reported to and audited by the New Mexico Public Regulation Commission.
Explanation of “Power Cost Adjustment”
This reflects the difference in the cooperative’s monthly increase or decrease in the wholesale cost of power as compared to the cost at the time the current rates were designed. A decrease in costs appears as a credit (CR) on the bill. These rates are approved by the New Mexico Public Regulation Commission. This figure changes monthly because of the different types of fuel used to generate electricity and the amount of electrical demand that is placed on the entire generating system.