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The investment value established by a regulatory authority upon which a utility is permitted to earn a specified rate of return. Generally, this represents the amount of property used and useful in public service and may include plants held for future use and may or may not include all or part of construction work in progress. The rate base may provide for the inclusion of working capital with positive allowances for cash-working capital, materials and supplies including fuel supplies and gas stored underground, bank balances, prepayments, and deductions for expense items such as property taxes and income taxes which are expensed currently but not paid until a later date. Rate base may also be adjusted to reflect customer payments for construction, company payments for advances, accumulated deferred income tax, and accumulated deferred investment tax credits to the extent the tax laws permit rate base adjustments.
The return allowed to be earned (generally based on a cost of capital determination) or earned by a utility enterprise, generally calculated by dividing the net operating income (as defined) by the rate base.
Resources that constantly renew themselves or that are regarded as practically inexhaustible. These include solar, wind, geothermal, hydro (water) and wood.
That portion of a resource that has been actually discovered and that is presently technically and economically extractable. Also, a rock stratum that forms a trap for the accumulation of oil and gas. Also, a natural, subsurface container of fluids.