The purpose of sections R4.80.501—R4.80.506 of this article is to set out standard guidelines for cost-of-service methodology and pricing objectives for use by municipal public utilities in preparation of cost-of-service studies, rate design, and related activity filings.
(AR No. 89-242(S))
A. 
The following are the primary objectives for the pricing of municipal public utility services:
1. 
The cost causer should be the cost payer;
2. 
The revenue requirement based on the municipal utility's approved or proposed budget;
3. 
Equity which includes the fair-cost apportionment of revenue among customer classes;
4. 
Optimal use which includes considerations of efficiency; and
5. 
Reasonable profit as required by [the] Charter.
B. 
A regulatory commission may, in its discretion, consider other pricing objectives on a case-by-case basis.
(AR No. 89-242(S))
Accounting costs, embedded or fully distributed, are the primary basis for designing rates. The regulatory commission may, in its discretion, upon an appropriate evidentiary basis, consider marginal or incremental costs in designing rates.
(AR No. 89-242(S))
Each municipal public utility shall use the general framework developed in its area of specialization as the foundation for conducting an accounting cost-of-service study.
(AR No. 89-242(S))
Each municipal public utility shall submit appropriate justification for and analysis of changes to the rate structure as such relate to its pricing objectives.
(AR No. 89-242(S))