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> Formula• Required <strong>Revenue</strong>s = Expenses +(Rate Base x Rate of Return)• Rate Base• Investment <strong>in</strong> facilities, equipment ando<strong>the</strong>r equipment used to provide service• Rate of Return• The return earned, or allowed to be earned,on <strong>the</strong> utilities rate base2
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