How the EcoVolt Utility Price Indices Are Constructed for Residential Customers
EcoVolt Finance LLC and its affiliated companies (collectively, “EcoVolt”) use an index to adjust the fees charged for EcoVolt’s solar panel Systems. There is a unique Local Index for each Local Utility Area where EcoVolt operates (each, a “Local Index”). All Local Index values moves upward or downward in response to changing utility prices as explained below:
Key Terms Applicable to Every Local Index for Residential Customers:
“Average Residential Load” means the average number of kilowatt-hours (“kWh”) of electricity used per capita in the Base Year in the Local Utility Area (as defined in your RIA). Average Residential Load is computed by dividing: (i) the total kWh of electricity sold to Residential customers in the Local Utility Area during the Base Year (on a “bundled service type” basis) by (ii) the total number of Residential customers who purchased the electricity of that service type during that year. All of this information is published by the U.S. Energy Information Administration (“EIA”) on Form EIA-861. EIA is part of the U.S. Department of Energy (“DOE”). (As of March 2016, Form EIA-861 data is published at: https://www.eia.gov/electricity/data/eia861/)
“Average Monthly Load” means the average number of kWh of electricity used by Residential customers per capita each month in the Local Utility Area. The Average Monthly Load is computed by dividing the Average Residential Load by 12.
“July Monthly Bill” means the total monthly charges a single utility customer with an Average Monthly Load in July would pay for electricity according to the then-current Utility Rate Tariff (as defined in your RIA) in effect on July 1st of a specific year (and assuming the utility customer did not have a solar panel system installed on their property). These total monthly charges include all possible fixed, variable, minimum and volumetric electricity charges, but exclude any taxes or demand charges.
Calculation of Local Index
EcoVolt computes your Local Index each year based on the July Monthly Bill for your Local Utility Area. The Local Index stays constant for twelve (12) months and is reset annually. The Local Index reset date is July 1st every year.
(a) Initial Local Index: The value of the initial July Monthly Bill for the Base Year equals a Local Index value of 100.0.
(b) New Year’s Local Index Values Thereafter: Every July 1st, a new July Monthly Bill is calculated in order to reset the Local Index for the subsequent 12 months. The Local Index is then adjusted upward or downward by multiplying the previous year’s Local Index by the current year’s July Monthly Bill, and then dividing by the previous year’s July Monthly Bill. The following formula is used to calculate the Local Index annually:
New Year’s Local Index = LI x JMB 1 / JMB 0
“LI” means the previous year’s Local Index.
“JMB 1” means the current year’s July Monthly Bill.
“JMB 0” means the previous year’s July Monthly Bill.
“x” means “multiplied by”.
“/” means “divided by”.
Conversion of a Local Index for a New Base Year
EcoVolt may convert a Local Index for a specific Local Utility Area to a new base year (each, a “New Base Year”) if:
(a) The Utility Rate Tariff used to create such Local Index (an “Existing Tariff”) has changed in its composition (referred to herein as a “Tariff Composition Change”), which changes may include:
(b) The Utility Rate Tariff is no longer available to existing utility customers (an “Expired Tariff”). In the case of Tariff Composition Changes or an Expired Tariff, the Base Year for the Local Index may be changed to a New Base Year, and/or the Local Index may be recomputed using the methods described in Section 5 and Section 6, respectively.
Utility Rate Tariffs that are affected by a Tariff Composition Change are referred to herein as “New Tariffs.”
Adding or deleting tiered pricing, or changing the number of tiers used with an existing tiered pricing scheme. (Tiered pricing means that utility customers are charged different prices per-kWh depending on how many kilowatt-hours of electricity they use.);
Adding or deleting TOU pricing, or changing the specific time windows in an existing TOU pricing scheme. (TOU pricing, also called “time-of-use” pricing, means that utility customers are charged different prices per-kWh depending on the time of day when the customer consumes electricity.);
Adding, deleting or changing territories within the Local Utility Area in a manner that changes the amount of the July Monthly Bill. (This would apply to Utility Rate Tariffs with charges that vary by territory within a Local Utility Area.);
Adding, deleting or changing the time periods, or TOU periods, for any seasonal rates charged for electricity during various times of the year;
Adding, deleting, changing or replacing any net metering, “value of solar” or virtual net-metering compensation programs, rules or policies if such changes affect the July Monthly Bill calculation;
In the case of California Local Utility Areas, any change in Utility Rates Tariffs, special payments, credits, refunds, or other benefits that impact any July Monthly Bill calculation; if such impacts are related to litigation concerning California’s energy crisis (in 2000-2001 and thereabouts).
Any other change to the composition of an existing rate tariff that impacts the July Monthly Bill calculation as determined by EcoVolt Holdings in its sole discretion; or
Calculation of Updates to Local Index for Tariff Composition Changes
EcoVolt will update its calculation of a Local Index affected by a Tariff Composition Change in the following manner:
(a) A July Monthly Bill will be calculated based on the rates in the Existing Tariff.
(b) A new assumption for electricity load (each, a “New Load Assumption”) will be chosen for the New Tariff. The New Load Assumption will be based on a changed electricity load and/or load profile that causes the July Monthly Bill calculations using the New Tariff (with the New Load Assumption) to match the previous July Monthly Bill using the Existing Tariff (with its corresponding load assumption).
(c) Thereafter, the July Monthly Bill amount used to calculate the Local Index will incorporate the New Load Assumption when calculating subsequent changes in the Local Index.
(d) The following formula will be used to calculate the Local Index for each year after any New Tariff goes into effect:
NLI = PLI x NJMB / PJMB
“NLI” means the new year’s Local Index for each year after any New Tariff goes into effect.
“PLI” means the previous year’s Local Index.
“NJMB” means the current year’s July Monthly Bill (computed using the New Tariff and New Load Assumption).
“PJMB” means the previous year’s Average July Monthly Bill.
“x” means “multiplied by”.
“/” means “divided by”.
New Local Index for Expired Tariffs and Updates for Demand Charges
If the Existing Tariff used for any Local Index becomes an Expired Tariff, or (b) the Existing Tariff is changed to include a type of fee called a “demand charge”, then EcoVolt will thereafter compute changes to that specific Local Index based on either:
(i) A different tariff in the Local Utility Area as chosen by EcoVolt, or
(ii) The U.S. consumer price index (i.e., CPI-U for All Urban Consumers, U.S. City Average, 1982/84=100, or “CPI-U”) published by the US Government Bureau of Labor Statistics,
as determined by EcoVolt in its sole discretion at the time. (A “demand charge” is a fee that charges customers for electricity based on the maximum amount of electricity consumed during any peak usage period; for instance, during any 15-minute window in any billing period; regardless of the cumulative kWh consumed by a customer during the customer’s billing period.)