Purchased Power Adjustment

What is a purchased power adjustment?

Naperville electric customers have an item on their utility bills called a purchased power adjustment. Learn more about how this tool, used to close the gap between estimated and actual power costs, may impact your bill.

A purchased power adjustment is either a credit or a charge on your utility bill each month. This makes sure customers aren’t overcharged or undercharged for electricity.

This is an example of a typical residential electric utility bill using 2017 rates that show a purchased power adjustment credit.

 

Unit Cost/Consumption Delivered/Unit (Kilowatt Hour)/Charge

EL Flat Res/.110700/177.31/KWH/19.63

EL Purchased PowerADJ/.003150/177.31/KWH/.17-

 

A PPA helps manage costs

Your utility’s cost of purchasing electricity changes often for many reasons, including weather, how well power plants are creating electricity, and market forces.

Utilities project costs as best they can. This helps set rates, but actual costs may vary. That means sometimes rates don’t cover the cost of power or are higher than necessary A PPA helps address that gap and can help avoid large rate increases later on.

Naperville uses a 6-month average to determine the PPA so that one month of much higher or lower costs than projected doesn’t cause a significant change in bills.

The PPA is calculated monthly on all energy usage (kilowatts per hour) for all customer classes, residential and commercial. It is based on a rolling six-month average of the Electric Utility’s cost for purchasing power.

 

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