The economy has put state commissioners and regulated utilities in precarious positions. Seven state chairmen explain how they’re applying fair rate treatment.
2009 Regulator's Forum: Walking A Tightrope
The economy forces tough decisions.
in learning how to save energy and implement cost-effective energy efficiency measures.
Cawley, Pennsylvania: A 2008 law required Pennsylvania EDCs serving more than 100,000 customers to establish an energy efficiency and conservation plan to help meet electricity consumption reduction targets of 1 percent by May 31, 2011, and 3 percent by May 31, 2013. The energy consumption reductions total 1.5 million MWh and 4.4 million MWh, respectively. The act also requires a 4.5-percent reduction in peak demand by May 31, 2013, which totals 1,193 MW. Peak demand is defined as the system’s top 100 hours of highest demand.
Pennsylvania EDCs began implementing the energy efficiency and conservation plans in October 2009. The programs include consumer give-aways for compact florescent light bulbs and rebates for exchanging old appliances for EnergyStar models. We required all of the state’s large EDCs to file a consumer education plan. Also we’re working to make consumers aware of: ways to reduce usage; pending rate increases once generation rate caps expire; utility mitigation programs (including the opportunity for customers to pre-pay or defer a portion of the rate increase); and the opportunities for shopping for electric generation. At the same time, we’re working to ensure that low-income consumers know about the steps they can take to reduce usage and programs available to help restore and maintain service.
Fortnightly: Has the down economy resulted in any novel rate structures being presented for consideration?
Brown, New York: In two recent major electric rate cases, the commission imputed savings that would result from utilities adopting austerity budgets. And on a generic basis, the commission required all major gas and electric utilities to closely examine their planned expenditures to identify costs that could be reduced without impairing their ability to provide safe and adequate service; essentially by adopting austerity budgets. Each utility was to also address the appropriate allocation of savings between customers and shareholders and to propose a mechanism to deliver savings to customers as promptly as possible. Some of the utilities have voluntarily agreed to provide additional payment-related assistance to customers during the last winter period.
Everett, Georgia: The commission has encouraged and approved the development of a critical peak pricing tariff for residential customers. The tariff currently is in the pilot stage. It’s used in conjunction with AMI metering. Customers that reduce load when a critical peak period is identified receive a credit for the reduction. If the customer doesn’t reduce load, the customer pays the standard tariff rate.
DelGobbo, Connecticut: Over the past five years, the department has undertaken a number of initiatives to implement time-of-use and other innovative rate options. Time-of use rates are now mandatory for all customers over 100 kW. One of our electric distribution companies also has seasonal rates, mandatory time-of use rates for larger residential customers and voluntary rates for all customers. The other electric distribution company currently doesn’t have the meters necessary for large-scale implementation of time-differentiated rates. The utility is conducting a major rate study to examine the costs and benefits of new rate options and the deployment of smart