COST ANALYSIS FOR ELECTRIC UTILITIES.
Cost analysis in electric-utility accounting has been somewhat neglected in the U.S. The common attitude has been that since there is only one product in most cases, the determination of cost per kilowatt-hour at various points in the generative and distributive process is as far as cost analysis need go. Many of the larger private and municipal utilities, however, have given serious attention to the possibilities of more extensive cost analysis. The estimates of the detail of expenses at various levels of output need to be studied to show which items were fixed and semi-fixed, and which could be more properly classed as variable. Since in an electric utility the productive capacity required is that necessary to take care of the peak load (with a reasonable margin of safety), it is a simple matter to reason that those customers who demand service at the time of the peak should bear the capacity costs in proportion to their respective demands at that time. They are the customers who are responsible for the peak and the advocates of the method hold that such customers should bear the costs of providing and maintaining the necessary capacity.
- DOI
- 10.2308/tar-7042393
- Volume
- 17 (3)
- Pages
- 257-264
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref