two-part tariff


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Two-Part Tariff

A set fee assessed with a purchase along with a per-unit charge. For example, a credit card carries a two-part tariff if it has an annual fee and a minimum fee with each purchase. A two-part tariff is not necessarily an import tariff.

two-part tariff

see TARIFF.

two-part tariff

a pricing method that involves a charge per unit of GOOD or SERVICE consumed, plus a fixed annual or quarterly charge to cover overhead costs. Two-part tariffs can be used by PUBLIC UTILITIES or firms to achieve the benefits of MARGINAL-COST PRICING while raising sufficient revenues to cover all outlays (so avoiding a deficit and problems of financing it). Simple two-part tariffs are presently used to charge customers for gas, electricity telephones, etc., although more sophisticated multipart tariffs can be adopted to reflect the different marginal costs involved in offering products like electricity and transport services at peak and off-peak periods. See also AVERAGE-COST PRICING, NATIONALIZATION, PEAK-LOAD PRICING.
References in periodicals archive ?
In order to convince these investors to empower an uncertain economy with no history of absorbing such a sizeable quantum of FDI, they were granted guarantees and de-risking initiatives under a two-part tariff regime i.e., energy payment and Capacity Payment.
All consumers, including residential consumers having 3-phase electricity connection above 5KW, would be subjected to two-part tariff and a minimum load factor of 0.90.
All consumers including residential consumers having 3 phase electricity connection above 5 KW to have two-part tariff and display power factor which should be not less than 0.90.
For the better part of the past century, residential customers in the United States and many other countries have paid for electricity through a two-part tariff that has collected most of the revenue through a flat volumetric charge--that is, flat electricity rates paid in cents per kilowatt hour (<t/ kWh).
The two-part tariff was developed by electrical engineers in the 1890s--initially by Hopkinson (1892).
The wholesale price contract, two-part tariff contract, and reverse revenue sharing contract are most common.
For example, with a basic two-part tariff, the regulator requires the company to set per-unit charges equal to marginal cost, yielding the efficient level of consumption and eliminating the deadweight loss associated with the monopoly.
Federated Wireless's suggestions to the FCC incorporate well-known two-part tariff economic models to align financial incentives, protecting against the risk of spectrum warehousing.
Regarding its core activity - electricity transmission - FSK has a two-part tariff consisting of a grid maintenance rate (RUB/MW per month), which is charged per MW of connected capacity, and a rate for electricity loss compensation (RUB/MWh), which is charged per MWh of normative technological loss of electricity in the transmission grid.
Let's now consider systems based on market price, dual pricing and the two-part tariff
The consumers' uncertainty potentially reduces their welfare and increases the firm's revenues, which are higher than those obtained with a two-part tariff. Nonetheless, the array of consumers' choices under a scheme designed to maximize profits must be explored from an empirical point of view (see, for instance, Reiss and White, 2006).
The carbon contract offered to a farmer by the aggregator is in the form of a two-part tariff: a fixed component [alpha] and a variable component [beta].