FERC Cost-of-Service Opinion 154-B
FERC cost-of-service methodology, WACC calculation, rate base concepts, and tariff structures
Total annual revenue needed to recover investment and earn allowed return.
Weighted average cost of capital using debt/equity structure with after-tax cost of debt.
Required rate per unit ($/bbl or $/MMBtu) to achieve revenue requirement.
A pipeline tariff calculator determines the required transportation rate using cost-of-service methodology, factoring in WACC, depreciation, O&M costs, and throughput.
FERC cost-of-service methodology calculates pipeline tariff rates by summing return on rate base, depreciation, taxes, and operating expenses, then dividing by throughput volume.
Key inputs include capital cost (rate base), weighted average cost of capital (WACC), depreciation schedule, O&M expenses, and projected throughput volumes.