2.1 Both before and during the Initial Period there shall be no Annual Energy Target, but the consumption of Energy during the Initial Period shall be measured in accordance with paragraph 6 below.
2.2 In respect of each Energy Year following the expiry of the Initial Period, the remaining provisions of this paragraph 2 shall apply for the purposes of calculating the Annual Energy Target applicable to the Facilities.
2.3 By no later than 1 Contract Month after the expiry of the Initial Period, Project Co shall provide to the Board a certificate showing:
2.3.1 the amount of Energy Consumption in each Contract Month during the Initial Period, expressed as a number of Units of Energy and measured in accordance with paragraph 6 below; and
2.3.2 the number of Degree Days in respect of each of those Contract Months.
2.4 Project Co shall plot a graph using the information referred to in paragraph 2.3 above in the following manner113:
2.4.1 the vertical axis of the graph shall show the total amount of Energy Consumption during the relevant Contract Month and the horizontal axis shall show the number of Degree Days in the relevant Contract Month;
2.4.2 for each of the 24 months in the Initial Period, a point shall be plotted on the graph where the Energy Consumption for that month meets the number of Degree Days in the Contract Month;
2.4.3 when all points on the graph have been plotted in accordance with paragraph 2.4.2 above, a straight line shall be drawn through all 24 points plotted on the graph which is a best fit to each of the points plotted on the graph, using the least squares method.
2.5 The straight line referred to in paragraph 2.4.3 above shall be projected until it crosses the vertical axis on the graph. The number of Units of Energy represented by the point at which the straight line crosses the vertical axis of the graph shall be the "Baseload", that is to say, the number of Units of Energy which is consumed each Contract Month at the Facilities, regardless of the number of Degree Days in that Contract Month.
2.6 The parties shall calculate the slope of the straight line referred to in paragraph 2.4.3 above, expressed in terms of the number of Units of Energy used per Degree Day (the "Slope"). This Slope, together with the Baseload, shall be used to calculate the Annual Energy Target.
2.7 The Annual Energy Target shall be calculated using the following formula:
Y - MX + C
where:
2.7.1 Y is the Annual Energy Target;
2.7.2 M is Slope and is expressed as the number of Units of Energy used per Degree Day, calculated in accordance with paragraph 2.6 above;
2.7.3 X is the number of Degree Days per annum, based on the 20 Year Average at the date of calculation of the Annual Energy Target; and
2.7.4 C is the Baseload number of Units of Energy used each Contract Month, calculated in accordance with paragraph 2.5 above, multiplied by a factor of 12.
2.8 The Annual Energy Target calculated in accordance with the provisions of this paragraph 2 shall be the target for Energy Consumption at the Facilities during the first Energy Year.
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113 It may be helpful to include an example of this calculation in an Annex to avoid future disagreement on methodology