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A charge levied on a customer to cover the costs of serving that particular customer, usually applied in situations where special costs are incurred by a utility to meet a given customer's needs. These charges are levied whether or not the customer actually uses any energy during the billing period. For a large-scale commercial customer, this charge may be applied to cover costs of making additional reserves available for that customer. For small individual customers, it may be applied to cover the costs of maintaining the customer's account and billing records, as well as a proportionate share of the costs the utility incurs to make power available to all residential customers.
See also:
demand charge, contract demand, energy charge, fixed costs