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- W408037 abstract "It is the general consensus that rates for electric service should be based upon, or related to, the cost of that service. This follows directly from the ''reasonable return'' premise. It is also accepted (at least among those familiar with the economics of utility operation) that the cost of service varies with the particular characteristics of use of the electric service subscribers. A step, then, in sound rate making must be the isolation of costs associated with providing electric service by service classifications. The cost allocation study is an engineering study guided by principles of law, economics, and accounting which apportion revenues, expenses, and rate base among various groups of customers of a given utility. This study is confined specifically to electric utilities, and is a difficult task because much of an electric system is used in common by all classes of service. The allocation of demand related costs is a most controversial area. Many methods of allocating capacity costs have been devised in an attempt to assess the relative responsibility of each customer class. The types of demand measurements that have generally been utilized successfully are average demand method, peak responsibility method, noncoincidental demand method, and average and excessmore » demand method. These are discussed and compared. (MCW)« less" @default.
- W408037 created "2016-06-24" @default.
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- W408037 date "1976-12-16" @default.
- W408037 modified "2023-09-26" @default.
- W408037 title "Allocation of capacity costs" @default.
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