Electric Utility Rate Design Study: costing for ratemaking. Topic Paper 2. Rate design study

Technical Report · Sat Aug 01 04:00:00 EDT 1981

OSTI ID:5159961

Malko, J R; Smith, D; Uhler, R G

The Rate Design Study research has determined that time-of-use (TOU) rates which achieve pricing objectives can be developed using a variety of costing methods and ratemaking approaches. Alternative accounting cost and marginal cost methods have been developed for designing time-of-use rates. To select among these alternative costing and ratemaking approaches, regulators and rate managers must consider their pricing objectives, such as conservation and fairness. The weight given to each objective may vary by utility system, state, or region depending on local circumstances such as dependence on oil for generation, weather, etc. In addition, the Study has contributed to the understanding of the identification of costing periods and the selection of rating periods. Moreover, the Study has explored the design of alternative block rate forms, e.g., flat rates versus inverted rates. Finally, the Study has demonstrated important relationships between costing and ratemaking issues and broader load management concerns, e.g., the questions of using marginal costs to attain economic efficiency and using accounting costs to determine the revenue requirement from each customer class.

• Research Organization: Wisconsin Public Service Commission, Madison (USA); Temple, Barker and Sloane, Inc., Lexington, MA (USA); National Economic Research Associates, Inc., Los Angeles, CA (USA); Electric Power Research Inst., Palo Alto, CA (USA)
• OSTI ID: 5159961
• Report Number(s): EURDS-85; ON: DE82906434
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
ACCOUNTING
COST
DESIGN
ECONOMICS
ELECTRIC POWER
ELECTRIC UTILITIES
POWER
PRICES
PUBLIC UTILITIES
RATE STRUCTURE
TIME-OF-USE PRICING