Minimum Distribution System Concepts and Applications

Basic Cost Components
The classification step of the cost-of-service study assigns
all of the functionalized cost elements to the cost causation
components of Customer, Demand, and Energy.
• Energy-related costs – variable costs which are
dependent on kWh requirements.
• Demand-related costs – fixed costs which are dependent
on kW requirements.
• Customer-related costs – fixed costs which are
independent of load or energy requirements.
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