By Scott A. Spiewak, Larry Weiss
Publication through Scott Spiewak and Larry Weiss
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Extra resources for Cogeneration & small power production manual
What all this comes down to is that a kWh of electricity produced at peak has a greater capacity cost associated with it than a kWh of electricity produced off-peak, unless the utility has plenty of surplus generating capacity. : the Fully Distributed Cost Method and the Marginal Cost (or Incremental Cost) Method. Fully Distributed Costs In the fully distributed cost method, the utility rate analyst attempts to apportion the total cost of service accurately among the various customer classifications and also to apportion the capacity cost, energy cost, and customer cost within each customer classification.
In the following segments we shall examine (1) the functional and causal aspects of cost and price variations, (2) basic rate principles, (3) rate structure design and criteria, (4) economic pricing principles, and (5) several computational methodologies employed in allocating cost. Functional and Causal Aspects of Cost Costs are categorized so that one can more accurately compute specific costs for each customer class, and then set prices based on the actual cost of service. This cost categorization process involves looking at a utility's cost from both a functional and a causal point of view.
It is generally expressed in terms of a fixed number of dollars per month. The next step is to show how functional cost and causal cost may be interrelated. Cost due primarily to the capital cost of generating facilities is classified as "capacity costs," while operating expenses may be divided between capacity related costs and energy related costs. Fuel costs are almost always allocated entirely to the energy cost category. The capital and operating expenses associated with transmission costs are usually considered capacity related costs.
Cogeneration & small power production manual by Scott A. Spiewak, Larry Weiss