1. (a) A Commission-approved purchased power adjustment provision may be adopted for use by electric distribution cooperatives subject to the jurisdiction of the Commission. The method for use by electric distribution cooperatives in compensating for change in the cost of purchased power is as follows:

   1. (1) Each electric distribution cooperative having an approved purchased power adjustment clause in its tariffs designed to compensate for any variation in the cost of purchased power above or below the base costs upon which the tariffs are based, by adjusting the charges, either upward or downward per kWh, billed under its tariffs, agreements, and special contracts approved by the Commission, shall employ the following formula to compensate for such variation: P.A. = (A), where:

      1. (A) P.A. = Power cost adjustment per kWh to be made, and
      2. (B) A = the amount in cents or fraction thereof by which the average cost of power per kWh paid to suppliers of power by the cooperative exceeds or is less than the cost of power per kWh used in the tariffs as the cost of power on which the rate was based. Any credits, refunds, or allowances on previously purchased power by the cooperative from any suppliers shall be deducted from the cost of purchased power before calculating "A" each month.

   2. (2) The Commission shall include in a purchased power adjustment clause an allowance for line losses if a preponderance of evidence points to the probable conclusion that failure to do so will result in less than a reasonable rate of return for the cooperative. When line losses are included in the purchased power adjustment charge, the following formula shall be used: P.A.= A÷(1-B), where:

      1. (A) P.A. and A have the same meaning as in the formula in (a)(1) of this Section.
      2. (B) B = The actual percentage of power losses expressed decimally.

      3. (C) This power loss will be computed monthly based on the following formula:

         1. (i) X = The total purchases in the twelve (12) month period ending one (1) month prior to the sales period.
         2. (ii) Y = The total sales for the preceding twelve (12) month period.
      4. (D) Then: B = (X - Y) ÷ X

   3. (3) Each electric distribution cooperative shall submit the following to PUD, and other parties as directed by a Commission Order or tariff, on a monthly basis:

      1. (A) The purchased power adjustment clause, including the factors enumerated in (2) above;
      2. (B) A rolling twelve (12) month average line loss schedule.
   4. (4) Each electric distribution cooperative shall file annually each calendar year a five (5) year analysis of the line loss by month with the purchased power adjustment clause that coincides with the filing of the annual Rural Utility Service (RUS) Form 7.
   5. (5) Line losses will be evaluated for reasonableness on a case-by-case basis. Variations from the standard provisions set forth in this Section must be sought pursuant to applications for permission to use such clauses, to be filed pursuant to 165:50-7-1.

Amended at 12 Ok Reg 2139, eff 7-1-95

Amended at 36 Ok Reg 704, eff 7-25-19