PPA Formula

The Purchase Power Adjustment

In addition to the base electric rates, each utility billing shall be adjusted for the cost of purchased power. The Purchase Power Adjustment (PPA) is shown on the utility bill as an “O” purchase power adjustment. The charge is solely related to the cost of electricity.

PPA(current month) = (Purchased Power Bill) + (Adjusted Operating Expenses) – (Electric System Income)

Total Kilowatt Hours (kWhr) Billed for Electrical Services

The terms set forth in the purchased power adjustment formula as noted above shall be construed as follows:

PPA(current month)Means the actual purchased power adjustment for the current electric billing month.
Purchase Power BillMeans the most recent bill paid and/or payable when due
Adjusted Operating ExpenseMeans monthly electric utility margin established through councilmatic action from budgetary hearings establishing annual appropriations which aredivided by twelve (12) (or the appropriate number of months remaining in the current budget cycle) excluding the budgeted amounts for 1) purchase power (705-5010-5-2365); 2) Kilowatt Hour Tax [i.e. payments to the State of Ohio for tax collected from outside users] (705-5010-5-2380); and the amounts appropriated in a specific budgetary line item relating to the payment of KWH tax to the general fund as per the appropriate Auditor of State bulletin. The adjusted operating expenses shall include all debt service payments including but not limited to: OMEGA JV5 payments, the diesel generator project in excess of reimbursements (base debt service less any reimbursement from AMP Ohio), any other AMP Ohio project participation requiring debt service; and monthly transfers to the Light Investment Fund. Adjusted Operating Expense shall be determined as follows:
Adjusted Operating Expense = (Total Annual Light Fund #705 Budget) – (Purchased Power Annual Budget) - (KWH Tax Budget [outside users]) – (KWH Tax Budget [inside users] + all debt service for electric projects)
Electric System IncomeMeans net 100% metered total billing for the most recent metered readings
Total Kilowatt Hours (kWhr) Billed for Electrical ServicesMeans the total kWhr billed for electric services used in establishing electric system income.
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