Hawaii Considering Alternatives to Private Sector Ownership
Leonard Hyman and William Tilles
Lawmakers in Hawaii are really asking three interconnected questions. Do we need stockholders or shareholders to finance our electric utility? Are we comfortable with private sector management setting goals for the local electricity business? If the electric business is run publicly as a not-for-profit, how will we set rates?
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.
Berkeley Lab’s Discussion with Five Experts
Lisa Wood, Ross Hemphill, John Howat, Ralph Cavanagh and Severin Borenstein
Five of our industry's top thought leaders weigh in on the white-hot controversy of rate design as utilities and regulators plot a course for electricity's future.
We talked with Adam Sieminski, Administrator at the Energy Information Administration
Adam Sieminski, with Pat McMurray
Adam Sieminski became the eighth administrator of the EIA in 2012. While awaiting confirmation as EIA administrator, Sieminski served as senior director for energy and environment on the staff of the National Security Council.
Survey of consumer advocates identifies areas of agreement and disagreement
Ryan Hledik and Ahmad Faruqui
This article summarizes perspectives on both sides of the demand charge issue. Based on this review, it proposes practical initiatives to address key concerns about residential demand charges.
Growing Impacts of Residential Solar on Utility Customer Service
Daniel Gabaldon, Matt Guarini and Jamie Wimberly
What does PV mean for utilities’ residential customer service operations? From helping customers with supplier selection, through installation and maintenance issues? And with billing? To begin to address this question, we conducted two sets of surveys of residential electricity customers in the second quarter of 2016.
Rate design should balance consumer and investor interests.
Regulators should ensure that changes to rate design seek to balance consumer and utility interests. Rates that are intended to insulate utilities from economic and technological change while providing no benefits to consumers ought to be considered unjust, unreasonable, and unduly discriminatory.
Utility performance, investment versus dividends, rate of return incentives
Generally speaking, regulatory commissions and courts are not anxious to substitute their judgement for that of utility management. A recent example where state regulators found it prudent to gingerly cross the line can be seen in a recent case involving Indianapolis Power and Light Company.
Federal income tax treatment has nothing to do with pricing sale of electricity to utility or customer.
Advocates for net metering argue that if the electricity delivered by the customer to the utility is credited at the full retail rate, the amount is not taxable, but if credited at less than the full retail rate, such as under a feed-in tariff or a value of solar tariff, the IRS might count the credited amount as taxable income. A tax expert fills us in on the other side of the story.
Annual formula rate is working to stabilize distribution ratemaking.
Ross Hemphill and Val Jensen
A lot has been said of alternative ratemaking approaches. The clearest, most direct path is what has been happening in Illinois, a success by any reasonable measure for a distribution utility.