Excerpt from the December 9, 2016 issue of PUR's Utility Regulatory News
Phillip Cross and Diane Boiler, Public Utilities Reports, Inc.
The New Jersey Board of Public Utilities determined that microgrids, whether based on CHP, fuel cell, solar, or some other technology, offer the promise of increased system resiliency. Especially with CHP-based microgrids, energy efficiency is advanced as well.
Two by Four, not a Nudge
Some might think that tweaking rates is all that is needed. This is false. Effective rate design must get customers’ attention. It is not a precise science that should be constrained by gradualism.
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.
Public Interest before Special Interest
We must get back to pricing fundamentals. The goals of performance and or incentive-based regulation apply to consumers and not just producers. Here are three questions that every rate design investigation should consider.
Many see a higher cap as a windfall for nuclear and coal.
FERC’s new rulemaking proposal would allow generators to tender supply bids higher than $1,000 per megawatt-hour, if it really costs that much to buy fuel to generate power. Some opponents say that may be OK for gas-fired turbines, but it’s not needed for nuclear or coal-fired plants.
Still Beyond the Pale?
Two decades into our grand experiment with wholesale power markets and we’re still debating the need for a cap on prices.
Especially in today’s politically charged environment
Trying to use ratemaking to address an increasing number of social issues intensifies the difficulty for regulators to reach a balanced outcome. Net metering stands out as economically inefficient, unfair and a regressive cross-subsidy, essentially an implicit tax on non-solar customers.
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.
Two back-to-back decisions by the Supreme Court in 2016 will fundamentally redefine the jurisdictional split.
Craig Roach and Vincent Musco
If the Supreme Court holds to the principles and logic of its ruling in EPSA, it will restore states’ traditional central role in resource planning.
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.