Law & Lawyers

In the U.S., electric utilities are the major supporter of MRPs. In other countries, the government has been a major proponent. Countries such as Australia, Canada and Great Britain have relied heavily on MRPs, often citing the deficiencies of traditional rate-of-return ratemaking.

A downward shift in peak usage may mean a beginning change in elasticity of demand. A more rapid and pronounced downshift in peak demand might suggest a less robust utility franchise value.

Debates over utility business and regulatory models have sidestepped a fundamental question: What do state legislators and regulators want the electricity utility of the future to do? Do they want "fat" utilities that play a larger role in implementing public policy and delivering energy services to customers? Or "skinny" utilities that are more narrowly focused on the ownership and upkeep of the grid?

In December 2016, Arizona's utility regulators set in motion a new policy many believe is likely to undermine investment in solar and other distributed technologies in the state. We urge advocates and regulators looking for sustainable models of state DER policy to think carefully before following Arizona's example.