7.  UTILITY COST ADJUSTMENT

7.1  The Utility Cost Adjustment shall be calculated in accordance with the following formula:

UCA = CA + VA

where:

7.1.1  UCA means the Utility Cost Adjustment;

7.1.2  CA means the Cost Adjustment per Unit, calculated in accordance with paragraph 7.2; and

7.1.3  VA means the Volume Adjustment, calculated in accordance with paragraph 7.3.

7.2  The Cost Adjustment shall:

(a)  for each Contract Month in the period prior to the establishment of an Annual Energy Target shall be calculated in accordance with the following formula:

and

(b)  for each Contract Month in the period following the establishment of an Annual Energy Target shall be calculated in accordance with the following formula:

where:

7.2.1  CA means the Cost Adjustment per Unit;

7.2.2  EC means the Energy Consumption in the relevant Contract Month;

7.2.3  AUC means the Average Unit Cost;

7.2.4  AUCo means the amount set out as the figure for AUCo in Appendix D to this Part 18 of the Schedule (Payment Mechanism);

7.2.5  RPIn is the value of RPI published or determined with respect to the month of February which most recently precedes the start of the Contract Year in which the relevant Contract Month falls;

7.2.6  RPIo is the value of RPI published or determined with respect to the Indexation Base Month;

7.2.7  AETo means the amount set out as the figure for AETo in Appendix D to this Part 18 of the Schedule (Payment Mechanism); and

7.2.8  AET means the relevant Annual Energy Target.

7.3  The Volume Adjustment shall:

(a)  for each Contract Month in the period prior to the establishment of an Annual Energy Target shall be calculated in accordance with the following formula:

and

(b)  for each Contract Month in the period following the establishment of an Annual Energy Target shall be calculated in accordance with the following formula:

where:

7.3.1  VA means the Volume Adjustment, which may be a negative number;

7.3.2  EC means the Energy Consumption in the relevant Contract Month;

7.3.3  AETo means the amount set out as the figure for AETo in Appendix D to this Part 18 of the Schedule (Payment Mechanism);

7.3.4  AUCo means the amount set out as the figure for AUCo in Appendix D to this Part 18 of the Schedule (Payment Mechanism);

7.3.5  AET means the relevant Annual Energy Target;

7.3.6  VA means the Volume Adjustment, which may be a negative number;

7.3.7  AET means the relevant Annual Energy Target;

7.3.8  AETo means the amount set out as the figure for AETo in Appendix D to this Part 18 of the Schedule (Payment Mechanism); and

7.3.9  AUCo means the amount set out as the figure for AUCo in Appendix D to this Part 18 of the Schedule (Payment Mechanism).