PPA Factors, Energy Costs and Consumption Comparison Relating to Energy Purchases

PPA Factors, Energy Costs and Consumption Comparison Relating to Energy Purchases from June through August of  2015 and 2016.

light-bulbThe attached information is being provided in order to inform Ellwood City Electric customers of the effect the reduction in the Transmission and Capacity charges set by PJM has had upon the Rate Adjustment (PPA Factor) and customer billings during the months of August, September and October.  A comparison of PPA components (Energy Purchased, American Municipal Power-Power Charges, as well as Transmission and Capacity Charges) were used. The Rate Adjustment is added to the electric bill of each user, Residential, Commercial and Industrial.

The Rate Adjustment for August of 2015 was 3.10 cents per kWh compared to1.80 cents per kWh in August of 2016, a difference of 1.30 cents per kWh. This savings was due in large part to the reduction of Transmission and Capacity fees charged the Borough by PJM Interconnection. These charges dropped from $172,359.36 to $106,139.71, a drop of $66,219.65 from the same period in 2015. In similar fashion, the Rate Adjustment for September of 2016 dropped to 1.35 cents from 2.47 cents in September of 2015, a savings of 1.12 cents per kWh. The Transmission and Capacity charges went from $172,117.00 to $111,072.30 a reduction of $61,044.70.

The October 2016 Rate Adjustment will be 1.20 cents per kWh while in 2015 it was 2.68cents per kWh, a reduction of 1.48 cents per kWh. The Transmission and Capacity charges were $172,658.49 and were only $109,982.90, for a difference of $62,675.59.

A customer using 500kWh in a month saw a reduction in August of $6.50, $5.60 in September and in October $7.40. A customer with usage of 1000 kWh saw reductions of $13.00, $11.20 and $14.80 in the same months.

Hot weather in August led to a spike in utility usage. August 2016 was the second hottest month of August since 1947.  The 76.0 degree average temperature was exceeded only by August 1995.The hot and humid weather lead to another record usage by the Borough for 2016.  Ellwood City’s customers as a whole used 5,962,000 kWh in August.  This is the highest amount of electricity by Ellwood City since July of 2013.

Thankfully, PJM pricing has returned to a more normal range and has provided much needed relief to the Borough and its Customers.