When stated in the electric rate schedule, there shall be included a Power Cost Adjustment, in addition to the other charge, representative of the purchased power charges paid by HMLP.

The Power Cost Adjustment rate per Kilowatt Hour shall be computed by utilizing the total cost of purchased power paid by HMLP to its suppliers for the period, adjusted for previous period’s recovery, divided by the total Kilowatt Hours of energy anticipated to be billed by HMLP for the period. The Power Cost Adjustment rate shall be calculated to the nearest thousandth of a cent ($.00001) in the following manner:

A Total Purchased Power cost including NEPOOL interchange charge to Accounts 555, 556, 557 and 565 (*) for the period plus the NYPA savings calculated pursuant to Schedule NYPA, all divided by:

B Estimated kWhs to be sold during the period will be compared to:

C Base period cost of purchased power per kWh sold.

The difference between the base cost and the annual cost per kWh estimated to be sold will be applied in the billing period. The Power Cost Adjustment will be calculated as follows:

PCA = A/B – C

This calculation will normally be made on a quarterly basis and a single Power Cost Adjustment billed for the entire quarter, although HMLP may change the Power Cost Adjustment more frequently if such changes are required.

(*) An adjustment to the purchased power cost shall be made to reflect the difference between estimated and actual purchased power costs and kWh sold in the prior period in order to recover or credit any under collection or over collection of purchased power charges.