Power Cost Adjustment (PCA) Rider

  Hope Water & Light Monthly Power Cost Adjustment Values

The Power Cost Adjustment (PCA) will apply to all classes of customers and will reflect the changes, either increases or decreases, to the Total Base Cost of Power

In order to eliminate the sometimes large increases and decreases to the monthly PCA charge caused by the month to month increase and decrease of the fuel cost adjustment in the wholesale power billing or the annual formula Rate True Up adjustment, the Power Cost Adjustment calculation will use the most recent twelve (12) month average cost plus or minus one twelfth (1/12) of the cumulative Over or Under collection of PCA Revenue of the previous month.

The monthly billing shall be adjusted upward or downward by an amount per kilowatt-hour to be calculated according to the following formula:

Power Cost Adjustment (PCA)   = NCPA   /   SA

The PCA shall be calculated to the nearest $0.000001 and when applied to bills will be rounded to the nearest cent.

DEFINITIONS

NCPA   =   Average of the previous twelve month Net Cost Of Power

NCPA is the twelve month average cost of power incurred by Hope Water & Light (HWL) in the preceding twelve month period after adjustments.

NCPA   =   TPCA - TBCA - C, where

TPCA = Average of the previous twelve month Total Power Cost

Total Power Cost is comprised of the following items:

1. The monthly wholesale cost of purchased power (Demand & Energy) delivered to HWL by the Southwestern Electric Power Company (SWEPCO).
2. The Transmission Cost associated with delivery of purchased power from Southwestern Electric Power Company to Hope Water and Light.
3. Adjustments to the purchased power cost resulting from "true-ups" as referenced in The Power Supply Agreement, by and Between Southwestern Electric Power Company and Hope Water and Light Commission, Effective January 1, 2008.

TBCA   =   Average of the previous twelve month Total Base Cost

Total Base Cost equal the Monthly purchased kilowatt-hours multiplied by $0.057371 per kilowatt-hour as determined in the Hope Water And Light Electric Rate Study, June 18, 2014, Exhibit 10A

C   =   One Twelfth (1/12) of the Cumulative Over/Under Collection of Revenue

One Twelve (1/12) of the Cumulative Over/Under collection of Revenue of the 2^nd previous month plus the Difference in Power Cost Adjustment Revenue collected in the previous month from the total of the Total Power Cost less the Total Base Cost of the previous month [C = 1/12 * Cumulative O/U]

SA   =   Average of the actual kilowatt-hours sold during the previous twelve month period.