There are three parts to the electric rate DMU charges; the basic (flat) rate, fixed usage rate and variable usage rate.
The basic rate is a monthly fee that is charged to help cover the cost of providing electricity to a residence or business, regardless of whether electricity is used or not. The equipment throughout the city that has been put in place to deliver electricity has a cost to maintain. If a house or business is vacant, the ability to deliver electricity is still present, and the service continues to need maintenance.
The fixed usage rate is designed to create a charge to each customer based on the amount of electricity is used. The fixed rate is set at the end of each year for the next year and is designed to fund all operational costs, including the wholesale cost of energy purchased.
The variable usage rate (PCA – power cost adjustment) is designed to account for unexpected charges to provide energy, or give DMU the avenue to reduce the overall usage rate when DMU is able to maintain and manage its cost each month to be lower than expected to produce electricity to the city.