Power Supply Cost Recovery (PSCR) FAQ

What is the Power Supply Cost Recovery?

The PSCR allows a utility to pass along to its customers any increases or decreases in the cost of fuel and purchased power. The PSCR charge appears on your electric bill as a separate line item under the energy charge portion of your electric bill.

Where does Edison Sault currently get its electricity?

Edison Sault’s energy is approximately 27% met by the renewable generation from the Edison Sault hydro plant and the U. S. Corp of Engineers hydro plant in Sault Ste. Marie. The remaining 73% of the power supply requirement is purchased under a wholesale contract with We Energies.

Why is my power cost increasing if it is generated by the local hydro facility?

Only about 27% of your power is generated by the local hydro facilities, as compared to years past when water levels on the Great Lakes were higher and hydro generation produced 40% of the energy needed to serve Edison Sault customers. In addition, hydro generation is not “Free Power” – ESE purchases low cost electricity from the Corps of Engineers Hydro Plant, and ESE must pay a monthly water bill to the Corps of Engineers for water used by the ESE Hydro Plant.

Why is the cost of the outside purchased power increasing?

The cost for coal fired generation has increased due to transportation problems in delivering coal to the power plants. The cost for natural gas fired generation has increased due to the recent increases in the cost of natural gas. Over the last 10-12 years, due to environmentalist’s lobbying efforts, most of the new generating plants built have been natural gas fired.  As of January 1, 2008, several low-cost purchased power contracts which ESE had negotiated in the mid-1990’s expired and had to be replaced with contracts based on current energy pricing.  Over 100 bids for purchase power were let, but only five wholesalers responded, and of the five only one, We-Energies met bid specifications.  The new wholesale energy contract with We-Energies creates a stable and reliable source for purchased power going forward, but unfortunately the pricing was significantly higher than the old contract pricing.

What can we do as consumers to reduce our electric bill?

Practice conservation whenever possible. The ESE website gives very useful information on how to use less electricity in your home – click here to see the Energy Conservation page.

Who watches over the amounts Edison Sault charges for its PSCR rate?

The Michigan Public Service Commission reviews and approves the PSCR charges on a yearly basis.

How much extra will customers pay?                    

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Last modified: May 01, 2008