Methods and tools for costing ancillary services

An overview of ancillary service concepts and practices in a number of markets and a description of means by which the costs of various services can be measured, quantified and allocated. General methodology for the allocation of ancillary service costs for services that can be considered as common goods. Tools based on notions of allocation based primarily on an extension of marginal costing to situations where revenue reconciliation is necessary. Many markets operate successfully with the need for guaranteed allocation of fixed costs but there are circumstances that suggest the use of allocation methods for the recovery of certain expenses.