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Cost-of-Service <br />Allocation of Costs <br />Based on an analysis of customer class service characteristics, the classified costs <br />summarized above were allocated to the major ERMUcustomer classes. <br />Allocation of costs was performed on a fully-distributed, embedded cost allocation <br />basis. Specific allocation factors were utilized in each of the cost classification <br />categories as described below. Exhibit 3-Econtains a summary of the <br />development of the various allocation factors. <br />uti <br />test year commodityrequirements was used to allocate <br />commodityrelated costs. <br />The customer facilities allocator was used to allocate costs associated with the <br />physical facilities required to serve individual customers. For the customer facility <br />allocators, a weighted customer allocation factor is developed. Weighting factors <br />are developed to represent the difference in service configurations between <br />customer classifications. For instance, a larger customer facility is required for a <br />single industrial demand customer than for a single residential customer. <br />The customer service allocator is for allocation of costs associated with customer <br />service meter reading, billing, collections and customer inquiries. As with the <br />customer facilities allocators, weighted customer service allocators are developed <br />-9- <br />190 <br />