(1) A utility's cost allocation and rate design practices and rate case proposals should support and complement the goals and objectives of these guidelines. Different approaches to allocating costs and designing rates have different advantages and disadvantages. A utility should consider these advantages and disadvantages in the context of the goals and objectives of these guidelines when proposing particular cost allocations and rate designs. A utility should evaluate and consider the following items when allocating costs and designing rates:

(a) the ability of opportunity cost-based prices to increase economic efficiency;

(b) cost allocation among customer segments and services based on cost causation and equity considerations;

(c) customer desire for long-term rate stability and understandable price structures;

(d) costs and benefits of implementing various rate types/structures consistent with recognized rate design principles, including:

(i) time-of-use;

(ii) seasonal;

(iii) blocked;

(iv) tiered;

(v) commitment-based; and

(vi) other structures as may be reasonable and consistent with the goals and objectives of these guidelines;

(e) the potential for retail demand-response to cost-effectively enhance economic efficiency and promote the other goals and objectives of these guidelines; and

(f) the potential for direct load control to cost-effectively contribute to retail demand response.

History: 69-8-403, MCA; IMP, 69-8-403, MCA; NEW, 2003 MAR p. 654, Eff. 4/11/03; AMD, 2008 MAR p. 575, Eff. 3/28/08.