A cost-based price is a price set by a seller of goods or services based on either the specific costs incurred for serving a particular customer or the average costs of serving all customers within a given group. In the energy, cost-based rates are typically set based on the customer's classification, so that costs of serving industrial customers are not borne by residential customers and vice versa.

Cost-of-service rate is a cost-based rate for a given commodity.

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