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Cost of Service & Rate Design |
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Home > Industries > Energy & Utilities > Utility Consulting > Cost of Service & Rate Design
Cost of Service & Rate Design
Your utility deserves a fair rate of return for providing services, and your customers deserve fair and equitable prices. Periodic cost-of-service studies help to ensure that all of your customer classes are being charged based on their cost of service. We work with you to determine the true costs associated with service delivery to your customers.
Solutions Beyond the Basics
Charging your customers accurately requires that you assign costs to customer classes based on the degree to which they are responsible for those costs. A challenge for utilities is that customer classes and usage change over time, and some customer classes could be subsidizing other classes if the utility is using outdated information. Virchow Krause helps utilities by designing fair and equitable utility rates for services. Our cost of service model allocates costs into functional areas, then fairly assigns those costs across customer segments. Whether you provide electric, water, wastewater, gas, or communications services, the result of our work provides all of the information you need to design equitable rates.
Advantages for You
Our Energy & Utility professionals:
- Develop rates for your customers that offer choices or rates that send signals to encourage them to change operational practices and conserve resources.
- Develop fees to recover pole carrying and operating costs.
- Evaluate pricing strategies under competition.
- Design fair and equitable pricing for services.
- Design rates that mitigate cross customer class subsidies.
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