Legal Definitions - meter rate

A meter rate is a pricing method used by service providers, most commonly utility companies, where the cost charged to a customer is directly calculated based on the precise quantity of a service or resource that has been consumed. This quantity is typically measured by a specialized device, known as a meter.

Here are some examples illustrating how a meter rate works:

• Residential Water Bill: Imagine a household receives its monthly water bill. The local water utility company doesn't charge a flat fee; instead, it uses a meter rate. A water meter installed at the property measures the exact volume of water used, often in cubic feet or gallons. The utility then applies a specific rate per unit of water consumed (e.g., $X per 100 cubic feet) to determine the total amount due. This ensures the household pays only for the water it actually used.
• Commercial Natural Gas Usage: A bakery uses a significant amount of natural gas for its ovens and heating. The gas provider charges the bakery based on a meter rate. A gas meter at the bakery precisely records the amount of natural gas consumed, typically measured in therms or cubic meters. The gas company then multiplies this measured consumption by its established rate per therm or cubic meter to calculate the bakery's monthly bill. This system ensures the bakery's costs fluctuate directly with its operational energy demands.
• Taxi Fare Calculation: When you take a taxi, the fare is determined by a meter rate. The taxi's meter continuously measures the distance traveled and the time spent during the journey. The taxi company has pre-set rates, such as a charge per mile or kilometer, and a separate rate for waiting time. The meter applies these rates in real-time to the measured distance and time, displaying the accumulating fare. The final amount you pay is the sum calculated by the meter based on these rates for your specific trip.