It is often said that ratemaking is as much art as science.
It is the process of setting a return on equity that is fair to both shareholders and consumers that demonstrates the art and science practiced by regulators. One case reported here provides a good glimpse at the entire range of issues put before regulators: a decision by the Michigan Public Service Commission setting electric rates for Consumers Power Company.
Should FERC rewrite rules or let states make reforms?
Idaho has a problem with PURPA. So does North Carolina, and other states in between. Utilities have complaints too. Consider industry groups like EEI, representing investor-owned companies, NRECA, representing co-ops, and even NARUC, representing state utility regulators. Each has proposed new rules to fix PURPA, a longtime favorite of enviros. And don’t forget Berkshire Hathaway.
New rule would align price settlements with real-time dispatch.
A misalignment of scheduling and price settlement opens the door to mischief.
A response to the ‘Following FERC’ column by Bruce Radford in our April 2016 issue.
The PUCO was not, and never will be, in a position to ensure terms of PPAs meet requirements of FPA.
Will the Feds weigh in on the great Buckeye brawl?
Ohio ratepayers could prosper if natural gas prices rise in the next few years, boosting revenues when the utilities resell into PJM markets.
FTRs make hedging possible, but can PJM ensure full funding without playing favorites?
Financial traders believe PJM’s proposal discriminates since they are more likely to hold counter-flow FTRs.
Demand response on appeal before the U.S. Supreme Court.
It could well be that demand response results in a more stable pricing environment that seems less risky to investors.
Understanding how PUC rate case findings differ from a utility’s financial reports.
(November 2015) Setting an allowed return on equity has consistently proven to be the most contentious and subjective part of a rate case proceeding.
A roadmap to ‘REV’ and its plan for restructuring.
New York's far-reaching reform plan, called the Renewable Energy Vision, or “REV,” seeks to decentralize power supply by encouraging distributed resources, and a new regulatory entity will be created called a “Distributed System Platform,” or DSP.
No proposal is as radical – or as well thought out – as REV.
If the New York Rev is fully implemented, utility earnings would depend more on creating value for customers and achieving policy objectives.