FERC electric rate primer

The author addresses elected cost-of-service, allocation, and rate design issues arising in Federal Energy Regulatory Commission (FERC) electric rate cases. Focusing first, in general terms, on how rates for an electric utility are derived at FERC, he then discusses current subjects arising from the: operating expenses, tax expense, revenue issues, rate base, rate of return, functionalization, classification, and allocation, and rate design. Despite a large number of electric rate cases set for hearing each year, the FERC staff can handle them because 70 to 80% of the cases settle. The material is this article is presented in hopes that it will encourage and guide these settlements. 220 references.