In this paper the authors' aim is to give an outline of a system of analysis of the costs of electricity supply, which is suitable for use by a large undertaking giving supply under very varied conditions to consumers of many different types.The system described has been evolved during the last eight years, in connection with the undertakings of the New-castle-upon-Tyne Electric Supply Co., Ltd., and its subsidiary companies, and though it has not necessarily reached its final development it has at any rate passed beyond the purely experimental stage.The paper gives an outline of the method of analysis of all costs and capital charges, but deals in greater detail with those involved by the smaller classes of consumers, the supply to whom is receiving so much attention at the present time.A complete example of an analysis is included to illustrate the method of working.The paper is divided into the following sections:-(1) Reasons for cost analysis and the principles aimed at in the system described.(2) An outline of the method of analysis.(3) Data concerning characteristics of use of electricity by various types of consumers, required in order to apply the information obtained from the cost analysis, and the methods adopted to obtain these data.(4) Practical applications of the analysis