Expense

An expense is an expenditure other than capital. Most expenses are a primary component of a utility’s revenue requirement (along with return on debt and return on equity). Though commodity expenses are often collected in a separate charge billed to only those customers who take commodity service from the utility. Common utility expenses include:

• Administrative and general

• Fuel (for generation in power plants or for running gas compressors on a pipeline system)

• Purchased power for resale to customers (for electric utilities)

• Natural gas for resale to customers (for natural gas utilities)

• Maintenance, including equipment replacement with a life of less than one year

• Operations

• Customer service

• Depreciation 

• Income and other taxes including franchise fees

• Public purpose programs