5 reasons to annually update electric construction overhead rates - the icing on the cake
- Jun 10, 2021 10:44 am GMTJun 9, 2021 10:23 pm GMT
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Electric overhead costs are the icing on the cake of an electric project - while the cake contains most ingredients, a cake is not a cake without frosting. This frosting is made up of the overhead costs that make the construction process possible. These include:
Stores expense, aka. materials management costs
Cost of capital - the Allowance for Funds Used During Construction
Administrative and general overheads
If all project costs are not recorded, including these overheads, customers will not fully reimburse your electric utility or cooperative for the total costs of capital replacement. Cash flow will suffer, directly impacting customer service and system reliability.