The Massachusetts Department of Public Utilities (DPU) has rejected challenges to an alternative price regulation plan proposed by NYNEX, a local exchange carrier (LEC). The New England Cable Television Association, Inc. had claimed that the DPU lacked authority to adopt a rate plan not tied directly to cost of service.
Until a few years ago, the concept of distributed or modular generation was largely academic. Recent developments in the electric power industry, however, have brought this once esoteric subject to the attention of utility executives as well as state and federal policymakers. Centralized, large-scale plans to use modular generators and demand-side management (DSM) to displace utility investments in bulk-power resources and high-voltage transmission projects is unrealistic.
Regulation of the United Kingdom's 12 regional electricity distribution companies (RECs) has sought to promote efficiency through the use of price caps that are supposed to remain in place for five years without regulatory intervention. The benefits of cost reductions between reviews accrue to shareholders no matter how much earnings might rise. The idea was to provide more incentive than if earnings were subject to review whenever they exceed some specified level.
Productivity has increased enormously under this system.
Widespread concern over nuclear plant decommissioning has triggered similar interest in the decommissioning of fossil-fired steam generating stations. This rising interest stems in part from the emergence of a competitive market in electric generation, which, among other things, threatens impairment of assets.
Fossil decommissioning issues are not nearly as contentious as those that attend nuclear plants.
(TRC) test has become the dominant method of comparing the costs and benefits of demand-side management (DSM) programs. Yet the TRC test fails to recognize the negative rate impacts from reduced kilowatt-hour consumption. DSM advocates argue that more extensive DSM programs will compensate for this flaw. If all customers have an opportunity to participate in a DSM program, they claim, customers' total bills will fall in spite of rising rates that pay for the DSM investments.
As competition in the electric industry increases, so does utility concern about the effect of demand-side management (DSM) programs on electricity prices. Because DSM programs often raise prices, several utilities have recently reduced the scope of their DSM programs or focused these programs more on customer service and less on improving energy efficiency (see sidebar). Whether all utilities should follow suit is, however, open to question. We contend that DSM programs do not always exert upward pressure on prices (em just sometimes.
The Pennsylvania Public Utility Commission (PUC) has reaffirmed earlier rulings establishing performance-based rate mechanisms for Columbia Gas of Pennsylvania, Inc., citing its authority to implement modified versions of a capacity-release sharing mechanism and an incentive mechanism for purchased gas costs.
All versions of the "revolution" in the electric power industry seem to turn on the prospect of competition in generation.
The Maine Public Utilities Commission (PUC) has terminated an ongoing rulemaking on stranded-cost recovery by electric utilities in the state. In closing the docket, the PUC cited proposed rules recently issued by the Federal Energy Regulatory Commission (FERC) as evidence of FERC jurisdiction in the matter.
Since the Federal Energy Regulatory Commission (FERC) issued its electric "giga-NOPR" on transmission access, stranded investment, and Real-time Information Networks (RINs), the heat is on (em and rising. Congress is busy, too. It's working hard on telecommunications, nuclear waste, and privatization of the federal power marketing agencies, but the odds may be growing against repeal of PURPA (the Public Utility Regulatory Policies Act) or PUHCA (the Public Utility Holding Company Act.