Calculating the Revenue Requirement in Electricity
Calculating the Revenue Requirement in Electricity
Calculating the Revenue Requirement in Electricity
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Rate of Return• Compensation to <strong>in</strong>vestors for <strong>the</strong>ir<strong>in</strong>vestment• A percentage applied rate base• To be recovered <strong>in</strong> rates• Generally two types of cost associated withROR – Cost of Capital• Debt Capital• Equity Capital• ROR = Weighted cost of capital4
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