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.


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



Additional resources and readings.

Topics for Discussion/Reflection


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