Rate Cases

Line Dividing Regulation and Management

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.

FERC v. Ohio

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.

Equity Returns: ‘Allowed’ vs. Earned

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.

Risk Holds Sway

Interest rates not always controlling for return on equity. 

(November 2014) Our annual survey of rates of return on common equity authorized by state public utility commissions in recent rate cases for electric and gas retail distribution utilities.

$9 Billion at Risk

If PJM markets should lose demand response as a capacity resource.

The AEMA sees the self-help DR revolution as a key to America’s recent industrial renaissance: “If demand response is removed from wholesale markets,” the group says, then “the electric grid is back to the rotary phone.”

The End of an Age

Survival in the new market requires embracing new technologies and practices.

New technologies are opening the utility domain to innovation and competition. Traditional utilities will shrink as outsourcing providers and competitors grow. Survival in this new market requires embracing new technologies and practices.

Customer First

Is the current regulatory compact in anyone’s best interests?

Serving customers’ needs should be a top priority for power companies, irrespective of the regulatory construct and business model. Transformation doesn’t change this basic fact, but how do we break the model without breaking the system?

Energy Efficiency Unmasked

Regulatory formulas for rewarding efficiency investments.

Effective conservation incentives would send appropriate price signals to consumers. The more common approach, unfortunately, involves arbitrary standards that introduce market inefficiencies and ultimately harm consumers.