Tiered Rate Calculations
Learn how to calculate tiered rate.
Tiered Rate Example:Table 1
|
Rate Type |
Lower Range |
Upper Range |
Fixed Price |
|---|---|---|---|
Fixed Price |
0 |
2000 |
.98 |
Fixed Price |
2000 |
5150 |
.93 |
Tiered Rate Example:Table 2
Customer |
Date From |
Date to |
Base Rate |
Expected Usage |
Over % |
Under % |
Over Index |
Under Index |
Over Adder |
Under Adder |
Actual Usage |
|---|---|---|---|---|---|---|---|---|---|---|---|
John Smith |
9/1/2007 |
10/1/2007 |
0.985 |
4480 |
10 |
10 |
GDD MAX |
GDD MIN |
.0123 |
-0.0123 |
6450 |
John Smith |
10/1/2007 |
11/1/2007 |
0.935 |
5150 |
15 |
15 |
GDD MAX |
GDD MIN |
.0123 |
-0.0123 |
In this example, Customer energy usage has two tiers: 0 – 2000, and 2000 – 5150, assuming 15% “swing” on tier two, which makes the sing range of upper range of tier two (4377.5 – 5922.5).
Overtake charges for Tiered rates works exactly the same as block rate. The only difference is that you have two “base” charges for the two tiers. As shown in the example above:
- John Smith’s meter read on 10/01/2007 was for 6450. There is an overtake of 527.5 (6450 –
5922.5). There would be three charges on his Invoice:
- “Base” Usage charge for 2000 at fixed price .98.
- “Base” Usage charge for 3922.5 (5922.5 – 2000) at fixed price .93.
- Overtake usage charge for 527.5 at the Overtake price.
Undertake charges for Tiered rates can be different depending upon which tier the actual usage was within. If the actual usage was greater than the lower range of the top tier, it would work exactly the same except you would have two “base” charges for the two tiers
If, however, the actual usage is less than the lower range of the top tier, the undertake charge must be spread across the tiers. Continuing our example:
- Assuming, John Smith’s meter read on 10/01/2007 was for 1850. There is an undertake of
2527.5 (4377.5 – 1850). There would be four charges on his Invoice:
- “Base” Usage charge for 1850 at fixed price .98.
- Undertake usage charge for 150 at fixed price .98 – Undertake price (i.e. .98 - .745 = .225)
- “Base” Usage charge for 0 at fixed price .93.
- Undertake usage charge for 2377.5 at fixed price .93 – Undertake price (i.e. .93 - .745 = .185)
There is no limit to the number of tiers you can configure for a Customer. If the Tiered rate is to use Block Price too, ALL TIERS MUST BE SETUP AS BLOCK PRICE (see screen print below for how to do this). This could simplify for any fixed cases as necessary through “fixed” indexes or other means.
Any of the fixed and index rate types for Client can be configured as tiered. Tiered rate and Block Price rate can also combine into tiered Block Price rate.