Overview of Rate Design Process 237 Identification of rate classes. Design of end-user rates. Each is discussed in turn. OVERVIEW OF RATE DESIGN PROCESS Total Revenue Requirements Total revenue requirements are total cost incurred by the utility in the provision of service. It is the amount to be recovered from ratepayers as authorized by the state's public regulatory commission. In determination of this amount, costs are grouped into capital, operations and maintenance, administrative, and taxes. The revenue requirement (or total cost of service) is the sum of the return on undepreciated capital investment and all other expenses. The standard equations for revenue requirements are 2 : RR = ðRBÞ*r + E + D + T + O and RB = ðPV - CDÞ, (8.2) (8.1) where RR is revenue requirements, r is allowed rate of return, RB is rate base,