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Updating Embedded Cost of Service Studies for a New Era

In the first blog post in this series, we outlined how our new manual, Electric Cost Allocation for a New Era, looks comprehensively at the process of dividing utility costs among customer classes — and proposes several ways it should be updated to account for modern features of the power system. In this second installment,…

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Cost Allocation: New Approaches for a New Era

Setting electric utility rates has traditionally been a three-step process: first, determining the revenue requirement; second, determining how to equitably divide costs among classes of ratepayers; and third, designing the rates themselves. That second step, cost allocation, is a process that has been around for decades, and many jurisdictions have created detailed precedents for how…