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<p class="MsoNormal">I was surprised to see some resistance to the cost causation. I think it might be helpful for our financial discussions to become more aware of the state of the art in this topic.
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Here is a section of administrative law drawn from energy utility regulation
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<p class="MsoNormal"><b><span style="color:black">Section 791.30 Cost Causation Principle</span></b><o:p></o:p></p>
<p class="MsoNormal"><a href="http://www.ilga.gov/commission/jcar/admincode/083/083007910000300R.html">http://www.ilga.gov/commission/jcar/admincode/083/083007910000300R.html</a><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Here is a more detailed slide presentation about how the cost causation principle is recognized in case law and how the principle is applied to effect cost allocation – again, in an energy regulation context<o:p></o:p></p>
<p class="MsoNormal"><a href="https://pjm.com/-/media/committees-groups/task-forces/emustf/20141113/20141113-item-03c-cost-causation-slides.ashx">https://pjm.com/-/media/committees-groups/task-forces/emustf/20141113/20141113-item-03c-cost-causation-slides.ashx</a><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Here is a complete article from economists on “Cost-Causation and Integration Cost Analysis for Variable Generation”<o:p></o:p></p>
<p class="MsoNormal"><a href="https://www.nrel.gov/docs/fy11osti/51860.pdf">https://www.nrel.gov/docs/fy11osti/51860.pdf</a><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Dr. Milton L Mueller<o:p></o:p></p>
<p class="MsoNormal">Georgia Institute of Technology<o:p></o:p></p>
<p class="MsoNormal">School of Public Policy<o:p></o:p></p>
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