The service territory of an electric utility is usually composed of many combinations of consumers. Private households and apartment buildings, where energy is consumed primarily for space heating, water heating, air conditioning, lighting, refrigeration, cooking, and clothes drying are classified as residential consumers. However, demand or annual usage may be the determining factor used by the electric utility to classify a consumer as commercial. Again, electric utilities may instead classify industrial service based on demand or annual usage. The average revenue per kilowatthour of electricity sold by electric utilities is calculated by dividing total annual revenue by total annual retail sales for each sector and State.
Utilities typically employ a number of rate schedules within a single sector.
These alternative rate schedules reflect the varying consumption levels and patterns of these customers and their associated impact on the cost to the electric utility for providing electrical service. The average revenue per kilowatthour by sector reported in this publication represents a weighted average of revenue and sales within and across sectors for all consumers. To derive the average revenue per kilowatthour, the operating revenue 24 reported by the electric utility is used. Electric utilities, like many other business enterprises, are required by various taxing authorities to collect and remit taxes assessed on its customers. In this regard, the utility serves as an agent for the taxing authority.