purchasing power

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Purchasing power

The amount of credit available for securities trading in a margin account, after taking margin requirements into consideration.

Purchasing Power

1. The value of a currency expressed as the amount of goods or services one unit of the currency can buy. Purchasing power is important to inflation, as the higher an inflation rate is, the fewer goods and services one unit of a currency can buy. To measure purchasing power, one must compare it with an objective standard; that is, one might compare how much one dollar can buy now versus how much it could buy 10 year ago. See also: CPI, Purchasing power parity.

2. The dollar amount of securities one can buy on a margin account. Different jurisdictions have different rules on how to measure purchasing power.

purchasing power

1. Consumer ability to purchase goods and services. Increased purchasing power represents proportionately larger increases in income than increases in the cost of goods and services.
2. The ability to purchase goods and services with a fixed amount of money. Within this narrower application, purchasing power is inversely related to the consumer price index. Increased purchasing power is a signal that future increases in economic activity are likely.

purchasing power

the amount of goods and services which can be purchased by a specified sum of money, given the prices of those goods and services. The greater the quantity of products which can be bought with, say, £20, the greater is the purchasing power of that sum of money. If prices go up (INFLATION), however, then purchasing power will fall. What is important for people and business is the long-run relationship of prices and the amount of money they have available to spend. If prices double, for example, but because people's wages are INDEX-LINKED, (i.e. related to a PRICE INDEX), wages also double, then purchasing power remains unchanged.

purchasing power

the extent to which a given monetary unit can buy goods and services. The greater the amount of goods and services purchased with, say, £10, the greater is its purchasing power. Purchasing power is directly linked to the RETAIL PRICE INDEX and can be used to compare the material wealth of an average individual from a previous time period with the present. See INFLATION, PURCHASING-POWER PARITY THEORY.
References in periodicals archive ?
It is often more cost-effective to purchase power than to generate it, said Sempra Vice President Peter Yu.
This risk is mitigated by the members' favorable historical record with cost recovery from the PSCW and that members rates include a purchase power adjustment clause that allows the members to pass changes in power costs without regulatory approval.
This five-month rate-setting process considers only PSE's costs to generate or purchase power supplies.
The 'A' rating takes into account new developments such as the proposed creation of a new cooperative, New Dominion Electric Cooperative (New Dominion), disagreements with ODEC's largest member, rising fuel and purchase power prices, and the following credit strengths and risks.
This move will result in a shift from a large portion of purchase power costs to increased debt service costs associated with the financing of the new generation.
PSNH's balance sheet has been strengthened over the last several years as proceeds from securitization bond offerings and generation asset sales were used to reduce outstanding borrowings and a debt-like purchase power obligation.
Other credit strengths include take-or-pay purchase power commitments through the life of the debt, and the financial stability of its members.
WECA's project output will be sold in its entirety to TID, pursuant to a long-term, take-or-pay purchase power agreement with TID (rated 'A+' by Fitch).
IP&L is burdened by neither uneconomic purchase power contracts, nor any other material stranded costs.
Our analysis of Brazos' power costs takes into account further development of a competitive wholesale electricity market in ERCOT, Brazos' power supply remaining mostly natural gas based, and our view that over time, as Brazos' new generation comes on line and new purchase power contracts are entered into, Brazos will realize power costs that trend closer to the market average.
The financial improvement is largely due to the rate order implemented by the Vermont Public Service Board (VPSB) in January 2001 that allowed full recovery of the costs associated with a long-term purchase power agreement (PPA) with Hydro Quebec (HQ).
Offsetting risks include a purchase power contract that expires in December 2003, making the system's small customer base vulnerable to potential large rate increases due to rising natural gas prices faced by power producers and brokers.