Common use of Determination of the Cost Clause in Contracts

Determination of the Cost. of Congestion at Ramapo The incremental cost of congestion relief provided by each Ramapo PAR shall be determined by each of the Parties. These costs shall be determined by multiplying each Party’s Shadow Price on each of its M2M Flowgates by the PSF for each Ramapo PAR for the relevant M2M Flowgates. The incremental cost of congestion relief provided by each Ramapo PAR shall be determined by the following formula: Where: Cost of congestion at each Ramapo PAR for the relevant participating RTO, where a negative cost of congestion indicates taps in the direction of the relevant participating RTO would alleviate that RTO’s congestion; Set of M2M Flowgates for the relevant participating RTO; The PSF for each Ramapo PARs on M2M Flowgate–m; and The Shadow Price on the relevant participating RTO’s M2M Flowgate m.