The "PCA"
In recent years, the part of your gas bill called the PCA has caused concern and has prompted many questions.
The PCA, also called a "product cost adjustment" or "purchased commodity adjustment", is a means by which the monthly price charged for natural gas is adjusted to correspond with the costs that the City incurs to acquire natural gas from the production areas and transport it to our area through the Transco gas transmission pipeline.
Just the same as the price of equity stocks, gasoline, milk or other commodities can change, so can the price of natural gas at the wellhead or other delivery points onto the pipeline. The monthly rates of all area gas utilities are based upon certain expected costs at the time the rate was enacted. The difference between these expected costs and the actual costs at the time the gas is used by customers is charged by the various utilities in one way or another, either by monthly changes to a portion of their rate or by use of an adjustment.
The PCA is a "pass-through" of the cost the City pays for gas. It is not marked up to increase the City's profit margin.
Among the factors that influence the PCA are weather conditions such as cold winters, hurricanes in off-shore production areas, economic conditions, speculation by investors and the volume of gas in storage facilities.