# Cost-of-service study A cost-of-service study is the analysis a regulated electric utility files in a base rate case to assign its total cost of service across customer classes. It "functionalizes" costs (generation, transmission, distribution, customer service), "classifies" them (demand-, energy-, or customer-related), and "allocates" them to each rate class by the principle of cost causation — that a class should pay the costs it imposes on the system. A *class* cost-of-service study ("CCOS Study") breaks the allocation down to the utility's defined rate classes. It is the document that determines, within a rate case, **who pays what**. ## How it appears in the corpus [[Matthew S. Klucher]]'s [[Class Cost of Service Study]] in [[Entergy Arkansas]]'s base rate case ([[psc/docket-26-001-u-2026-05-22/_overview|Docket 26-001-U]]) is the corpus's anchor document for this concept. It allocates a Total Retail Revenue Requirement of $1,997,481,780 — and a $44.6 million proposed increase — across Entergy Arkansas's four rate classes: Residential, Small General Service, Large General Service, and Lighting. The granular workpaper behind the testimony is [[26-001-U Doc 47 Volume 6 Schedules G|Schedule G-1]] in Doc. 47, which allocates the full $11.7B rate base, $2.1B operating revenue, and $692.7M O&M expense by rate class. Two features of that study matter to the investigation: - It contains **no data-center, hyperscale, or large-load rate class**; cost is allocated to the four conventional classes only. [[26-001-U Doc 47 Volume 6 Schedules G|Schedule G-1]] shows the entire retail allocation across Residential ($5.3B rate base), Small General Service ($3.05B), Large General Service ($3.13B), Lighting ($180M), and Wholesale (effectively zero — $108K). - It **excludes customers served under [[Special rate contract|special rate contracts]]** — "they are not served under standard retail rates and are not included in cost allocation as part of the CCOS Study" ([[Class Cost of Service Study]], p. 30). The largest, individually-contracted customers are therefore outside the public cost-of-service picture. - **But** the rate-base CWIP underlying the study **does** include data-center-named transmission projects — [[26-001-U Doc 47 Volume 1 Application and Schedules A-B|Schedule B-8]] line items for [[AVAIO Digital Partners|AVAIO Project Leo]] and [[Project Pulse|DC Devco's Gum Springs site]]. The cost of those transmission assets is functionalized into the Production / Transmission allocation in Schedule G-1 and ultimately spread across the four rate classes — even though the special-contract revenue from those data centers does not appear in the public study. ## Stakeholders The utility prepares the study; the [[Arkansas Public Service Commission]] and its [[APSC General Staff]] review it; every customer class is affected by how cost is allocated. A class found to be "under-paying" its cost of service faces an above-average increase; an "over-paying" class can be held flat. ## Timeline - **2026-02-27** — Entergy Arkansas files its class cost-of-service study with its base rate case, Docket 26-001-U. ## Notes A cost-of-service study determines cost allocation *within* a rate case. It does not capture costs recovered through separate riders — Entergy Arkansas's new-generation cost is recovered outside the base rate case through the [[Generating Arkansas Jobs Act (GAJA) rider]].