Costing and pricing for old and new customers

Journal Article · Thu Apr 29 04:00:00 EDT 1982 · Public Util. Fortn.; (United States)

OSTI ID:5457251

Hanke, S H ^[1]; Wenders, J T

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1. Johns Hopkins Univ., Baltimore, MD

Facing increased fiscal difficulties, local governments and investor-owned utilities alike have begun to alter methods of financing and pricing for the utility portions of urban infrastructure. Increasingly, reliance has been placed on capital contributions by new utility customers, which are regarded as being equivalent to initiation fees for membership in a club. Whether referred to as connection charges, tap fees, or system-development charges, all require a capital contribution for the direct new service provided. Some also require a contribution for some portion of the costs of the existing system. In addition, there are numerous proposals that would require new customers to pay more per unit of consumption than old customers. This article analyzes, from an economic standpoint, the issues surrounding costing and pricing for old and new customers. The analysis finds no economic rationale for distinguishing between old and new utility customers when both make joint use of infrastructure facilities. 2 tables.

• OSTI ID: 5457251
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 109:9; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320603 -- Energy Conservation
Consumption
& Utilization-- Municipalities & Community Systems-- Public Utilities-- (1980-)
CAPITALIZED COST
COST
ECONOMIC ANALYSIS
ECONOMICS
ELECTRIC UTILITIES
FINANCING
LOCAL GOVERNMENT
PRICES
PUBLIC UTILITIES
RATE STRUCTURE