About the Power Cost Adjustment

The City of Monett, through its purchasing group, the Southwest Power Pool, which also includes Mt. Vernon and Lockwood, rents a share of the power produced by Plum Point and some other power generating facilities in the region through and agreement with Liberty. The Southwest Power Pool has requirements that each member carry a required amount of capacity, which is a certain percentage above the community’s maximum load. Liberty currently guarantees that capacity to the city. 

When the city’s share of power generation exceeds the community’s use, the city can sell it back to the grid to help offset power costs for residents. Likewise, if the community uses more power than generated by its share of the plants, Monett purchases electricity to make up the difference.

The PCA is a formula that is applied each month to ensure the large fluctuations that are typical of the buying and selling of electricity have a minimal impact on residents. However, in some situations, like when power use is unexpectedly low or other sources of power, like natural gas, wind or solar, becomes cheaper or more readily available, the demand for the city’s excess electricity decreases, meaning the city sees a lower-than-expected return on those sales.

In March, the city experienced both lower-than-expected demand, as well as unusually low natural gas prices, which further drove down the sale price for power.

With the city’s contract for energy supply set to expire next year, the city is looking at ways to diversify its power portfolio, which will help stabilize the fluctuations in the PCA in similar circumstances in the future.