wholesale price in this study has been imputed, based on the estimated cost of generation. The wholesale price is thus an estimated price or cost at the bus bar. It has been derived from data reported to the FPC by electric utilities in their annual reports.

The procedure used in developing the imputed price has been to add on an estimate of fixed charges to the actually reported production expenses and to divide this sum by the total reported net electricity generated, resulting in a cost per kilowatt hour. The fixed charges associated with generation plants consist of five major elements—the cost of money, depreciation, interim relplacements, insurance, and taxes. These are related to the total capital cost or gross investment in the electric plant in service and are expressed by the FPC's Bureau of Power on a levelized basis as a percentage of this total investment. This percentage of total investment varies with ownership categories. For privately owned utilities used in this study it is 14 per cent; for publicly owned, 7.5 per cent. The appropriate percentage was applied to the value of steam, nuclear, hydraulic, and other plant in service for each utility to derive the fixed charge estimate.

Two exceptions to the above procedure are Nashville Electric and Seattle Department of Lighting. The Tennessee Valley Authority functions as a wholesaler of electricity, generating it and selling it to local distributors throughout the area. The Seattle Department of Lighting, in addition to generating a portion of its requirements, purchases power from the Bonneville Power Administration. In these two instances the prices are actual wholesale prices rather than imputed.