Residential Demand Charges: An Overview

1. Effectiveness in yielding total revenue requirements under the fair-return standard

2. Revenue stability and predictability

3. Stability and predictability of the rates themselves

4. Static efficiency, i.e., discouraging wasteful use of electricity in the aggregate as well as by time of use

5. Reflect all present and future private and social costs in the provision of electricity (i.e., the internalization of all externalities)

6. Fairness in the allocation of costs among customers so that equals are treated equally

7. Avoidance of undue discrimination in rate relationships so as to be, if possible, compensatory (free of subsidies)