Program Dollar Limitation Clause Samples

Program Dollar Limitation. The cost associated with the program is capped. The current cap which may be changed with approval of the BPU is $6.4 million; the current cap was approved by the BPU in the October 3, 2008 Order approving the Stipulation in the base rate case. The $6.4 million includes the premium costs of the options purchased for the program, NJNG’s 15 percent share, credits from option close, and broker fees/commissions. Calculations for the above individual FRM components are as follows: • Option premium costs – determined based on the premium rate obtained at deal inception multiplied by the number of option contracts purchased, multiplied by 10,000 (1 contract = 10,000 dths). • NJNG sharing dollars at 15% – calculated as DRI Benchmark minus Strike Price minus the premium paid, multiplied by the number of option contracts purchased times 10,000 dths less fees at purchase, with 15% credited to NJNG; these sharing dollars are determined at the time the option is purchased, since both prices are known at deal inception. • Credit from option close – calculated as Market price (penultimate) minus DRI Benchmark; these amounts are not determined until option settlement date when the penultimate price becomes available. Additionally, only resulting gains (and not losses) are applied as a credit to the program dollars. • Broker fees/commissions – flat individual rate per contract.