Cost of Service Allocation Calculator
Allocate utility operating costs across customer classes using NARUC methodology
What You Can Do
You can develop complete cost-of-service analyses that allocate utility operating expenses across customer classes based on NARUC cost causation methodology. The skill guides you through reclassifying costs by function (generation, transmission, distribution, customer service), selecting defensible allocation drivers tied to actual cost causation, and building rate structures that withstand regulatory scrutiny and legal challenge.
Features
apply the regulatory standard used across US utility commissions
select allocation bases that logically connect costs to the classes causing them
reorganize accounting data by utility function rather than historical accounting categories
identify when customer classes are subsidizing others and quantify the impact
build defensible testimony exhibits and regulatory filings with documented cost allocation logic
compare your allocation approach against peer utilities and regulatory precedents
prepare documented responses to regulatory commission interrogatories on methodology
Example Output
Example 1: Distribution Cost Allocation
- Demand-related costs (transformers, poles, service lines) → allocated by peak demand (kW) across residential, commercial, industrial
- Customer service costs (metering, billing) → allocated by number of customers in each class
- Result: Industrial class reflects $8.2M of the $12M total distribution cost due to higher peak demand, residential bears $2.1M
Example 2: Subsidy Identification
- Current residential rate structure recovers 94% of allocated residential cost of service
- Commercial class recovers 103%, industrial class recovers 107%
- Finding: Residential customers subsidized by $1.8M annually due to outdated rate design
Example 3: Rate Case Testimony Exhibit
- Schedule of allocated operating costs by function and customer class
- Documentation of each allocation driver selection with cost causation rationale
- Comparison to prior year and peer utility methodologies
What's Included
- SKILL.md instruction file with step-by-step NARUC allocation methodology:
- Cost allocation driver selection framework with causation documentation template:
- Customer class cost build-up worksheet (residential, commercial, industrial, special contract):
- Cross-subsidy analysis template to identify misallocations:
- Rate design justification exhibit template for regulatory commission filings:
- Peer utility allocation methodology comparison checklist:
Who It's For
- Rate analysts preparing utility rate case filings before regulatory commissions
- Utility regulatory affairs managers developing rate design strategies
- Energy consultants building defensible cost allocation testimony
- Regulatory commission staff reviewing utility cost of service proposals
- Utility finance teams analyzing rate structure fairness and cost recovery
Best For
- Developing cost-of-service exhibits for regulatory rate cases
- Allocating capital investments across customer classes using cost causation
- Identifying and quantifying cross-subsidies between customer groups
- Building rate design proposals that survive regulatory and legal scrutiny
- Responding to regulatory commission discovery requests on cost allocation methodology
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