A criterion of distribution cost

The commercial performance of an Area Board can be judged by its success in keeping the distribution cost per kilowatt-hour down to the lowest possible figure. The absolute magnitude of this figure, however, depends on a number of factors which are largely outside the Board´s control, such as the load factor and the sales per consumer. By making an appropriate adjustment for these factors, Boards can be compared on a uniform basis. After the costs and revenues associated with auxiliary services have been deducted, the average costs of electricity supply in 1951-52 are related to kilowatt-hours, kilowatts of demand, number of consumers, etc., and expressed in pence per kilowatt-hour. The sum of these separate components minus the net deficit on the year´s working equals the average price per kilowatt-hour throughout the country. A similar method is then applied to each separate Board´s figures, using constants based on the average values for the whole country. The sum of these components plus or minus any net surplus or deficiency accounts approximately, but not precisely, for the mean revenue per kilowatt-hour of the Board in question. The differences (here called ¿discrepancies¿) disclose how far each Board´s economy of operation departs from the average for the country, allowing for all the known functional variables. The figures can be used to compare the overall economies of the different Boards and to establish a form of target. The results show that each Board´s total cost can be accounted for on functional grounds to within a small percentage, and that the outstanding differences show a marked geographical distribution. In subsequent Sections the figures for 1952-53 and 1953-54 are presented, the year´s changes are examined and the general conclusions are summarized.