Rate Base

Value established for a utility by a regulatory body such as a Public Utility Commission on which the company is allowed to earn a particular rate of return. Generally the rate base includes the utility's operating costs but not the cost of constructing new facilities. Whether modernization costs should be included in the rate base, and thus passed on to customers, is a subject of continuing controversy. See also Fair Rate of Return.

Guaranteed average net paid circulation of a periodical set by the publisher according to the number of copies he believes he can sell on a consistent basis. It is used by advertisers to evaluate the benefit of advertising in that periodical. Space advertising prices are based upon the rate base, and if the rate base guarantee is not set, the publisher must compensate advertisers for the difference. Copies sold in excess of the rate base, commonly called bonus circulation, are free.