The Florida Public Service Commission has approved a set of conservation programs proposed by Peoples Gas System Inc., the only natural gas local distribution company in the state required by law...
Weather Risk Management for Regulated Utilities
- predictions can impact the price significantly.
- Generally, when the weather is warmer than normal, declining block rates provide some protection to the revenue stream to the extent that the load falls off in the lower-priced tailblocks. Conversely, when the weather is colder than normal, flat commodity rates cause the revenue stream to increase at a greater rate than declining block rates.
- Another factor that could impact recovery is the asymmetric way a HDD is defined: positive if below 65 degrees, zero if above 65 degrees. Above 65 degrees it does not matter if it is 67 degrees or 71 degrees; both give rise to zero HDDs. Thus abnormally warm weather can be underestimated using a HDD approach.
- Conversely, in mild winters the utility may over-collect from customers.
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.