Calculating the Revenue Requirement in Electricity
Calculating the Revenue Requirement in Electricity
Calculating the Revenue Requirement in Electricity
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<strong>Revenue</strong> <strong>Requirement</strong>s• The annual revenues required by <strong>the</strong>firm to cover both its expenses and have<strong>the</strong> opportunity to earn a fair rate ofreturn.• The annual costs to provide safe andreliable service to <strong>the</strong> company’scustomers that <strong>the</strong> company is allowedto recover through rates.1
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