Cost of Service Studies

Our experts will design rates for each class of service to help meet your utility’s revenue needs and any other rate design goals and objectives you have.

Greater Insight Into Costs

Completing a cost of service study provides clients with a methodology to equitably allocate the revenue requirements to serve each customer class. By comparing the actual cost to serve with your current revenues, we can provide you with the data you need to make informed decisions about your pricing.

Key Benefits of Cost of Service Study

Provide rates that recover the cost of serving customers

Understand alignment of rates with operational costs

Define optimal cost-based rate structure

Reduce cross-subsidization between classes

Create foundation for future financial planning

Steps of a Cost of Service Study

  • Define revenue requirements
  • Unbundle costs by:
    • Functionalizing
    • Classifying
    • Allocating
  • Identify fixed & variable costs
  • Define cost to serve each customer class
  • Determine cost-based rate structure