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