Illinois Power & Light just spent $5 million repairing one of its electrical generating stations that was damaged by a tornado. The loss was uninsured. Management has asked the public service commission for approval to treat the $5 million as an asset for ratemaking purposes rather than as an allowed expense. Assume the public utility commission sets ROA at 10%. What difference will this make to customers?

a. This request makes no difference to customers

b. Customers will pay an additional $5 million in higher electricity costs under both plans.

c. Customers will pay $5.5 million in higher electricity costs if the repair costs are an allowed operating cost for rate-making purposes.

d. Customers will pay $5.5 million in higher electricity costs if the repair costs are treated as an asset for ratemaking purposes.