Cost of Service Study
A cost of service study will provide the fixed and variable costs required to service each customer class of the electric facility and compare actual cost with current revenues anticipated by each customer class serviced. A cost of service study will provide:

  • A review of each rate class to identify any need to add a new class by:
    • Changing the dividing line for demand between Large General customers and Small General customers
    • Determining the need and value of adding a new class of service to large customer categories
    • Developing rates for customers with multiple locations within a service territory to adjust for diversity between the accounts and develop a "Campus Billing" rate
  • Unbundled electric rates into components that are necessary to identify appropriate rates for customers taking service at various service levels
  • Wheeling rates that are determined using the unbundled cost of service results
  • Time of Use rates using the cost of service and the unbundled cost results
  • Review and assimilate load survey information from sample data base(s)

Rate Design Model

  • Proposed Charges for each customer using the cost of service and unbundled cost results to move each toward actual cost of service
  • Summary of changes in projected revenues and proposed revenues for each customer class
  • Detailed report for each customer class that identifies the rate of increase against several levels of usage

Financial Projection

  • Revenue requirements for current (test year) and future requirements over a five year planning horizon
  • Rate change options over the planning horizon
  • Future projected sales to customers and their corresponding revenues
  • Projected changes in power supply costs and their corresponding expenses
  • A pro-forma income statement and statement of cash flows
  • Key Financial targets will be provided for the following targets:
  • Minimum Cash Reserves
  • Debt Coverage Ratios
  • Target Operating Income
  • Current and future capital improvements will be included
  • Annual impacts on operating revenues and expenses
  • Requirements for future bonding to fund planned capital improvements

Other Electric Services

  • Indirect Cost Allocation Review
  • Rate Survey of other similar utilities
  • Power Cost Adjustment Calculations or Fuel Cost Adjustment Calculations
  • Transmission Rate development
  • Unbundling Cost-of-Service
  • Policy and Procedure review and development
  • Software Selection
  • Economic Forecasting of sales and load growth
  • Cost Reduction Strategies
  • Benchmarking Analysis
  • Line Extensions
  • Strategic Planning
  • Feasibility Analysis
  • Financial Analysis