"Spread" in Electric Utility Rate Structures

This brief article seeks empirically to measure rate differentials in electric utility rate structures. A Gini coefficient is developed which measures the degree of inequality in rates charged to various electric customer classes. A high Gini coefficient is associated with large rate differences while a low coefficient suggest a flatter rate structure. This index represents a first effort to summarize rate relationships and is intended to be suggestive rather than definitive. Though interpretation of the index would involve bold assumptions, it does suggest an empirical approach in an area which has been theoretical and speculative.