Flat Charge | This type of rate component is used to create bill lines that levy service charges and fees that aren't based on how much the customer uses. The monthly service charge shown above would be levied using this type of rate component. |
Service Quantity | This type of rate component is used to create bill lines that levy charges based on some type of consumption. The kWh charge shown above would be levied using this type of rate component. Frequently the amount consumed is measured by a meter's registers and sometimes it's calculated using Service Quantify (SQ) Rules linked to the rate and sometimes it's derived based on the type of item (e.g., for lamps). Regardless of how the amount consumed is calculated, the charge for the consumption amount is levied using this type of rate component. You'll find it helpful to differentiate your service quantity rate components into two categories - stepped and non-stepped. Stepped charges are those where there's a different price for different ranges of consumption (e.g., the first 50 therms are $0.43 a therm, anything in excess of 50 therms is charged at $0.71 per therm). We recommend doing this because a) you frequently show a subtotal of the steps on the customer's bill, b) steps, by definition, mean you have several rate components that are dependent on each other, and c) they frequently involve complex calculations in order to define the step boundaries. |
Item Type | This type of rate component is used to create bill lines that levy charges based on the number and type of items used by a customer. The system keeps track of items on the service point(s) linked to the customer's service agreement. The lamp charge shown above would be levied using this type of rate component. |
Apply To | This type of rate component is used to create bill lines that levy charges based on the amount calculated on other bill lines. The county surcharge shown above would be levied using this type of rate component. |
Summary | This type of rate component is used to create a "subtotal" on the bill. It exists purely for aesthetic purposes. |
Minimum Charge | This type of rate component is used to create bill lines that levy charges only when the sum of previously calculated lines is less than the minimum charge amount. The minimum monthly charge shown above would be levied using this type of rate component. Note that if the values being compared are negative values, the comparison is NOT done on the absolute values, but rather on the actual values. For example, imagine you have a minimum discount of $ -2.00 and previous rate components have calculated a discount of $ -1.00. You want a rate component to create a bill line for $ -1.00 to apply a further discount. A minimum charge rate component will not work in this case because -1 is considered more than -2. For this business scenario you should use a maximum charge rate component. |
Maximum Charge | This type of rate component is used to create bill lines that levy charges only when the sum of previously calculated lines is more than the maximum charge amount. Note that if the values being compared are negative values, the comparison is NOT done on the absolute values, but rather on the actual values. For example, imagine you have a maximum discount of $ -2.00 and previous rate components have calculated a discount of $ -3.00. You want a rate component to create a bill line for $1.00 to reduce the discount. A maximum charge rate component will not work in this case because -3 is considered less than -2. For this business scenario you should use a minimum charge rate component. Note - these types of rate components are rare. You tend to only see them in deregulated markets where customers have agreed to pay the market rate but want a cap on the maximum they'll pay each bill period. |
Exact Charge | This type of rate component is used to force a bill to add up to a given amount (regardless of how much the bill would be based on earlier rate components). Note - these types of rate components are rare. You tend to only see them in deregulated markets during the transition period between regulated rates and complete deregulation. In this situation, you show on the bill what the charges would be, given a deregulated environment, but then adjust the bill back to an amount equal to the regulated rate. This charge is called a Competition Transition Charge (CTC) in California. |
Calculation Algorithm | This type of rate component enables you to produce bill calculation lines based on logic in an algorithm that you supply. Use this rate component when none of the other rate component functions will provide you with the logic you require. |
Interval Pricing | This type of rate component is used to apply interval prices to interval quantities. See Interval Pricing Rate Application for more information. |
TOU Pricing | This type of rate component is used to map and/or price interval quantities into time of use quantities given a TOU map. See Time of Use Mapping and Pricing for more information. |
Specify value in the rate component | You'd specify the value in the rate component when the value in the rate is specific to that rate and is applied to all customers regardless. For example, if you see a provision in the rate that says to charge $0.05674 per kWh, you'd specify 0.05674 directly in the rate. |
Use a bill factor to define the value | The following paragraphs describe when you'd use a bill factor to define a unit rate / percent / flat amount. The same charge exists in many rates. For example, if there are 3 rates that all contain the same service charge, it would make sense to use a bill factor to levy this charge rather than specify the same value on 3 rate components. The amount being charged is dependent on some physical characteristic of the customer's equipment. For example, if the price differs depending on whether the customer owns the transformer, you would use a bill factor to specify the price. The amount being charged is dictated by some external organization and therefore can change independently from the rate. For example, tax percentages and use fees are set by taxing authorities and can be changed at any time (and you don't want to change the rate when these charges change). The amount being charged varies depending on WHERE the customer lives. If you have a rate where the price per gallon differs depending on where the customer lives, you should use a bill factor to levy this type of charge. The price differs per customer. For example, you may have a rate for large gas customers where the price per therm is different for every customer. In this situation, you would use a bill factor to specify the price. |
Use a "for calculation purposes only" rate component | This is complicated to explain and is not used very often, but it is very powerful and handles some very complicated algorithms. It works like this - you calculate the price / percent / flat charge on another rate component (marked as "for calculation purposes only" so it won't affect the bill amount), and then reference it on the "real" rate component. See the Calculated Minimum Charges example for an illustration of when this method is useful. |
Call an algorithm | This is complicated to explain and is not used very often, but it is very powerful and handles some very complicated examples. It works like this - you call an algorithm and it calculates the price / percent / charge. One example that would require the use of an algorithm would be when the price differs based on the total amount consumed. For example, if the customer uses less than 10 CCF, the price is $1.50; whereas if the customer uses more than 10 CCF, the price is $2.00. We supply an example of one such algorithm in the base package. If your rates require additional algorithms, you will have to develop additional algorithms. Refer to How to set up service quantity rate components under Rate Component - Main Information for more information about this type of algorithm. Please note that this scenario could also be implemented without invoking an algorithm by setting up two rate components that have eligibility rules to indicate their required respective consumption levels. Refer to The Big Picture of Rate Component Eligibility for more information. |