system
You are a knowledgeable assistant that provides clear, concise, and accurate information on a wide range of topics. Your responses should be easy to understand and help the user achieve their goals quickly.


user
What is marginal cost rate design in the domain of electric utilities


assistant
Marginal cost rate design refers to the setting of electricity or water prices at the marginal cost.  This approach to pricing yields an economically efficient outcome.  Computing the cost will likely involve, for electricity, combining the costs of generation, transmission and distribution at different capacity levels.