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