Common use of Loss Allowance Clause in Contracts

Loss Allowance. Because the Authority’s charges for power and energy established by its rate schedules are applicable at the Authority’s Niagara Switchyard, replacement power customers must pay for the replacement power and energy actually measured at their meters and the replacement power and energy lost in the process of delivery from the Authority’s switchyard. Except where adjustment for losses is specifically provided for, the billing arrangements herein accomplish this result without the application of any separate allowance for losses. Where adjustment of any contract demand for losses is provided for, the loss allowance for Niagara Mohawk’s system, exclusive of the marginal losses on the Bulk Power System as calculated by the NYISO or any successor thereto, shall be multiplied by the quantity “one minus the loss allowance established herein”. Such loss allowance was initially established as 0.5% (.005) of the amounts transmitted from the Niagara Switchyard, and this loss rate remains in effect under this Agreement. Such loss adjustments shall be in addition to the marginal losses established in the NYISO OATT and paid by the Authority under Special Provision I of this Exhibit B.