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per kilowatt-hour, and a $2 charge for a maximum demand of 2 kilowatts during the month at the rate of $1 per kilowatt -- a total bill of $8 for that month.

But our present interest lies in the measurement of costs of service, and only indirectly in rates that may or may not be designed to cover these costs.

Let us therefore consider each of the three types of cost in turn, recognizing that this simplified classification is used only for illustrative purposes ; ;

costs actually vary in much more complex ways.

1.

The customer costs

These are those operating and capital costs found to vary with number of customers regardless, or almost regardless, of power consumption.

Included as a minimum are the costs of metering and billing along with whatever other expenses the company must incur in taking on another consumer.

These minimum costs may come to $1 per month, more or less, for residential and small commercial customers, although they are substantially higher for large industrial users, who require more costly connections and metering devices.

While costs on this order are sometimes separately charged for in residential and commercial rates, in the form of a mere `` service charge '', they are more frequently wholly or partly covered by a minimum charge which entitles the consumer to a very small amount of gas or electricity with no further payment.