Revenue Structure Clause Samples

Revenue Structure. This section describes how MET targets its prices to earn zero profits. Section 2.3.1 defines MET’s rate classes and gives their prices. Section 2.3.2 describes how MET targets its weighted average price at aver- age cost. Before we get to those details, a few comments are useful: First, MET’s costs are 20 percent vari- able (for pumping water) and 80 percent fixed (infrastructure, overhead, etc.). Un- til the 1960s, most of MET’s revenue came from property taxes (see Section 3.11); to- day, 80 percent of MET’s revenue comes from water sales, and the remainder comes 10According to ▇▇▇▇▇ ▇▇▇▇▇▇ (MET’s CFO), the first 800 TAF of CRA water uses cheap ▇▇▇▇▇▇ power (▇▇▇▇▇▇, 2007b). If MET moves move, it must buy power on the open market at substantially higher prices. 11The curves reflect an SWP price of $220/AF. MET claims that $450/AF (the price of full service untreated water in Table 2.3) represents its cost of additional supplies, i.e., MET’s backstop price.