What is the difference between incremental and cumulative rates in utility
electric block charges? I want to make sure I understand it precisely
before trying to create utility rates.
Where would I find this information? So far I have not been able to locate
a precise definition of these two terms in the help files. Perhaps I am
looking in the wrong places?
Lawrence,
The following is from the help file:
Volume 2: Dictionary > Economic Components > BLOCK-CHARGE
BLOCKS-ARE
For energy-type blocks, accepts a code-word specifying the meaning of the entries in BLOCKS-1 through BLOCKS-5. Allowed values are:
INCREMENTAL Indicates that each successive block entry covers the next size block.
CUMULATIVE Indicates that each successive block also includes the energy of all previous blocks.
For example, an electric utility lists its charges as follows:
Up to 1000 kWh $0.05/kWh
Up to 3500 kWh $0.07/kWh
Above 3500 kWh $0.08/kWh
This rate can be entered in either of the following formats, both of which will produce the same answer:
BLOCKS-ARE = INCREMENTAL
BLOCKS-1 = (1000, 2500, 1)
COSTS-1 = (0.05, 0.07, 0.08)
BLOCKS-ARE = CUMULATIVE
BLOCKS-1 = (1000, 3500, 1)
COSTS-1 = (0.05, 0.07, 0.08)
Hopes it is clear enough...
____________
Demba NDIAYE