How the Power Ratings Are Derived
I analyze the score of every game and adjust the actual points scored to reflect the quality of the opponent, and the location of the game (home or away). For example, consider New England's first game, a 27-24 victory over Indianapolis. Indianapolis' defense gives up almost exactly the average number of points that other NFL teams have, 0.994 times as many to be precise. So we can say that scoring 27 points against them is pretty much like scoring 27.2 points against an average team using the formula (27/.994). However, because the game was played at New England, the spreadsheet is not as impressed with New England's performance as it might otherwise be. Home Field Advantage in the NFL amounts to about three points. We allocate half of that to offense and half to defense, so the net adjustment to the offense's score is 1.5 points. Thus, New England's scoring 27 points at home against Indianapolis is considered the equivalent of them scoring 25.7 points against an average team at a neutral site.
For the Patriot's defense, the spreadsheet looks at Indianapolis's scoring per game as compared to the league average. The Colts have scored 1.629 times as many points as an average NFL team, so we could say giving up 24 points to them is like giving up 14.7 points to an average NFL team (24/1.629=14.7). However, the game was at New England, so I add 1.5 points to the opposition's score. Thus, giving up 24 points to the Colts at home is considered the equivalent of giving up 16.2 points to an average team on a neutral field.
After every game has been scored like this, New England comes up with an adjusted total of 374 points scored and 208 points allowed, or 166 points above average for the season. Since there have been 13 games played as of last weekend, the Patriots are about 12.8 points per game better than an average team. To avoid having to deal with negative numbers for bad teams, the Power Rating is added to 100; New England's power rating is thus 112.8.
A team's adjusted points scored and adjusted points allowed are generally fairly close to their actual points scored and points allowed this late in the season. But for teams facing a weak or strong schedule the numbers can vary substantially. Looking at Cleveland, for example, they have given up 98 more points than they've allowed. But they've faced a very difficult schedule, with two games each against Pittsburgh and Baltimore and with Phillly, New England, Buffalo and the Jets among their non-divisional opponents. Their opponents' average Power Rating has been 103.8. So the spreadsheet sees their numbers as a little better than they appear, for a net negative 48 points instead of negative 98 points. Seattle, which has faced the easiest schedule in the league, is adjusted downwards from its positive 16 points to negative 26.