M10 - Rate Structure: Cost Allocation Methods

Learning Objectives

In this module we will talk about the fundamentals of cost allocation methods and will go over a few well-known methods. The specific learning outcomes are:

• Understand the basic principles for cost allocation;
• Overview the three paradigms for cost allocation;
• Learn/Recap DC Power Flow Analysis.
• Explore 4 embedded cost method: Postage Stamp, MW-mile, Modulus and Zero Counterflow;
• Explore 1 incremental cost method: ICRP;
• Understand the revenue reconciliation process and why some of these methods will not recover the entire required revenue;
• Apply all these methods to a case study.

Slides

Here is a link to the slide deck used in class.

Recordings

• Intro to Cost Allocation
• Power Flow Calculation
• Fixed Cost Methods
• Case Study - Part 1
• Incremental Methods
• Case Study - Part 2

Resources

Additional resources and readings.

• Tariff Design for Distribution Systems

Topics for Discussion/Reflection

Deliverables

There will be no assignment/journal associated with this module. Work on your final project.