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Average revenue realised falls short of average billed tariff because of

  • A.the cross subsidy between consumer categories
  • B.the depreciation charged on the utility's assets
  • C.failure to collect part of what is billed
  • D.the losses in transmission and distribution

Answer: C

Correct answer: failure to collect part of what is billed

Average billed tariff is what appears on the bills; average revenue realised is what is actually received. The gap is the collection shortfall - arrears, non-payment and write-offs. Losses and cross subsidy affect the billed figure itself rather than the difference between the two, which is why collection efficiency is tracked separately.

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