Purchased Power Adjustment Factor

Effective for all bills issued on and after May 1, 2014, the charges to all customers for each kilowatt hour (kwh) supplied under all rates except for market rates and those with a separate contract shall be adjusted by a Purchased Power Adjustment Factor (PPAF) to reflect the actual changes in the cost of purchased power. The PPAF will be determined to the nearest $0.0001 in accordance with the following formula:

((PP + T - WR) / K)x (TKP / TKS) - BC

Formula Key
  • PPAF = Purchased Power Adjustment Factor
  • PP = Cost of purchased power form all suppliers and from the PJM market in the 2 months prior to the billing month, including any ancillary costs directly related to the cost of purchased power.
  • T = Cost of transmission in the month 2 months prior to the billing month, for all power purchased or sold, including any ancillary costs directly related to the cost of transmission, less transmission revenue.
  • WR = Revenue from wholesale sales in the month 2 months prior, including sales of excess power into the PJM market.
  • K = Number of kilowatt hours purchased in the month 2 months prior to the billing month.
  • TKP = Total kilowatt hours purchased in the 12 preceding calendar months.
  • TKS = Total kilowatt hours sold at retail and wholesale in the 12 preceding calendar months
  • BC = Base Cost of power purchased including cost of delivery
    • May 1, 2014 - BC = $0.06372 per kilowatt hour
    • May 1, 2015 - BC = $0.06882 per kilowatt hour
PPAF Billing
The PPAF shall be calculated and applied to customer bills on a monthly basis consistent with the above calculation except for those customers that use budget billing. Budget billing customers will have the PPAF applied on a monthly basis but will accumulate the adjustment and such adjustment will be incorporated when the budget billing amount is adjusted as required.

In the event that the information necessary to calculate the PPAF is delayed or unavailable, the PPAF may be calculated and applied in a following month in order to avoid a delay in the issuance of billings.