Using Cost of Service Studies
Using Cost of Service Studies - A current cost of service looks back at historic cost and plant data from a recent 12 month period and provides the data necessary to determine “where we are now” from a financial perspective. A cost of service study provides detailed information about the cost of serving each class of customers, such as operations and maintenance expenses, purchased power costs, plant investment, operating margin and rate of return. It is the basis for developing cost based rates for utility service. However, a cost of service study has many other uses.
For many utility personnel, a cost of service study is a seldom used document gathering dust on a shelf. This course shows how to get the most out of your cost of service study by exploring the many possible uses of the information contained in the cost of service study.
This course will show utility management and personnel how to utilize a cost of service study to:
a. Adjust existing rates
b. Unbundle rates
c. Develop rates for perspective customers
d. Target economic development
e. Develop line extension policies
f. Make comparisons over time and with other utilities
g. Developing performance measures
h. Price non-standard services
i. Analyze carrying costs for economic analysis of alternative capital projects
j. Provide cost elements for special services
k. Respond to customer rate inquiries and debates