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Book Performance based Ratemaking for Electric Utilities

Download or read book Performance based Ratemaking for Electric Utilities written by and published by . This book was released on 1995 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance-Based Ratemaking (PBR) is a form of utility regulation that strengthens the financial incentives to lower rates, lower costs, or improve nonprice performance relative traditional regulation, which the authors call cost-of-service, rate-of-return (COS/ROR) regulation. Although the electric utility industry has considerable experience with incentive mechanisms that target specific areas of performance, implementation of mechanisms that cover a comprehensive set of utility costs or services is relatively rare. In recent years, interest in PBR has increased as a result of growing dissatisfaction with COS/ROR and as a result of economic and technological trends that are leading to more competition in certain segments of the electricity industry. In addition, incentive regulation has been used with some success in other public utility industries, most notably telecommunications in the US and telecommunications, energy, and water in the United Kingdom. In this report, the authors analyze comprehensive PBR mechanisms for electric utilities in four ways: (1) they describe different types of PBR mechanisms, (2) they review a sample of actual PBR plans, (3) they consider the interaction of PBR and utility-funded energy efficiency programs, and (4) they examine how PBR interacts with electric utility resource planning and industry restructuring. The report should be of interest to technical staff of utilities and regulatory commissions that are actively considering or designing PBR mechanisms. 16 figs., 17 tabs.

Book Performance based Ratemaking for Electric Utilities

Download or read book Performance based Ratemaking for Electric Utilities written by and published by . This book was released on 1995 with total page 106 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance-Based Ratemaking (PBR) is a form of utility regulation that strengthens the financial incentives to lower rates, lower costs, or improve nonprice performance relative traditional regulation, which the authors call cost-of-service, rate-of-return (COS/ROR) regulation. Although the electric utility industry has considerable experience with incentive mechanisms that target specific areas of performance, implementation of mechanisms that cover a comprehensive set of utility costs or services is relatively rare. In recent years, interest in PBR has increased as a result of growing dissatisfaction with COS/ROR and as a result of economic and technological trends that are leading to more competition in certain segments of the electricity industry. In addition, incentive regulation has been used with some success in other public utility industries, most notably telecommunications in the US and telecommunications, energy, and water in the United Kingdom. In this report, the authors analyze comprehensive PBR mechanisms for electric utilities in four ways: (1) they describe different types of PBR mechanisms, (2) they review a sample of actual PBR plans, (3) they consider the interaction of PBR and utility-funded energy efficiency programs, and (4) they examine how PBR interacts with electric utility resource planning and industry restructuring. The report should be of interest to technical staff of utilities and regulatory commissions that are actively considering or designing PBR mechanisms. 16 figs., 17 tabs.

Book Performance based Ratemaking

Download or read book Performance based Ratemaking written by Michael Ray Schmidt and published by . This book was released on 2000 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Performance based Regulation in a High Distributed Energy Resources Future

Download or read book Performance based Regulation in a High Distributed Energy Resources Future written by Mark Newton Lowry and published by . This book was released on 2016 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Performance-based regulation (PBR) of utilities has emerged as an important ratemaking option in the last 25 years. It has been implemented in numerous jurisdictions across the United States and is common in many other advanced industrialized countries. PBR’s appeal lies chiefly in its ability to strengthen utility performance incentives relative to traditional cost-of-service regulation (COSR). Some forms of PBR can streamline regulation and provide utilities with greater operating flexibility. Ideally, the benefits of better performance are shared by the utility and its customers. The shortcomings of traditional COSR in providing electric utilities with incentives that are aligned with certain regulatory goals are becoming increasingly clear. In particular, COSR can provide strong incentives to increase electricity sales and utility rate base. Further, some parties express concern that traditional COSR does not provide utilities with appropriate financial incentives to address evolving industry challenges such as changing customer demands for electricity services, increased levels of distributed energy resources (DERs), and growing pressure to mitigate carbon dioxide emissions. In addition, attention to potential new regulatory models to support the 'utility of the future' has renewed interest in PBR. This report describes key elements of PBR and explains some of the advantages and disadvantages of various PBR options. We present pertinent issues from the perspectives of utilities and customers. In practice, these different perspectives are not diametrically opposed. Nonetheless, this framework is useful for illustrating how various aspects of PBR may be viewed by those key groups. Regulators have a unique perspective, in that they must balance consumer, utility, and other interests with the goal of achieving a result that is in the overall public interest"--Executive summary.

Book Reinventing Electric Utility Regulation

Download or read book Reinventing Electric Utility Regulation written by Gregory B. Enholm and published by Public Utilities Reports. This book was released on 1995 with total page 516 pages. Available in PDF, EPUB and Kindle. Book excerpt: Learn from this collection of thought-provoking commentary on change and electric regulatory reform from executives, state regulators, and federal commissioners in the regulatory community. Plus, perspectives from other players -- the utilities governed by these regulators, the financial community (rating agencies), independent power producers, and public power.

Book Electric Utility Rate Reform and Regulatory Improvement Serial No 94 128

Download or read book Electric Utility Rate Reform and Regulatory Improvement Serial No 94 128 written by United States. Congress. House. Committee on Interstate and Foreign Commerce. Subcommittee on Energy and Power and published by . This book was released on 1976 with total page 908 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Rates and Rate making for Electric Utilities

Download or read book Rates and Rate making for Electric Utilities written by Thomas Matthews and published by . This book was released on 1920 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Book Energy Utility Rate Setting

Download or read book Energy Utility Rate Setting written by Lowell Alt and published by Lulu.com. This book was released on 2006-08-01 with total page 151 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Practical Guide to the Retail Rate Setting Process for Regulated Electric and Natural Gas Utilities. This book explains how the traditional rate-setting process is commonly done for energy utilities. This book includes a discussion of revenue requirement, rate base, cost of capital, expenses, revenues, rate-making objectives, cost of service studies, rate design, the rate case process, tariff policies, metering, service quality and other types of cases affecting rates. The book concludes with a numerical example showing the calculation steps from revenue requirement to rate design.

Book Review of Performance based Ratemaking Plans for US Gas Distribution Companies

Download or read book Review of Performance based Ratemaking Plans for US Gas Distribution Companies written by and published by . This book was released on 1994 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Performance-Based Ratemaking (PBR) is receiving increasing attention by energy utilities and their regulators. PBR is the industry term for forms of regulation that increase financial incentive for performance relative to traditional cost-of-service/rate-of-return (COS/ROR) regulation. In this report, PBR plans filed by US gas local distribution companies (LDCs) are described and reviewed. The rationale behind energy utility PBR is presented and discussed. Using nine plans that have been proposed by eight LDCs as a basis, a framework (typology) to facilitate understanding of gas utility PBR is presented. Plans are categorized according to the range of services covered by the PBR mechanism and the scope of the mechanism's cost coverage within a service category. Pivotal design issues are identified and, based on the sample of plans, observations are made. Design issues covered include the length of time that the PBR is in effect (term); the relationship between PBR plans and status quo ratemaking; methods for formulating cost or rate indices, earnings sharing mechanisms, and service quality indices; and compatibility with gas utility DSM programs. The report summarizes observations that may be considered supportive of the rationale behind PBR. PBR is, however, not clearly superior to traditional regulation and few PBRs that are broad in scope have been adopted long enough to allow for a empirical analysis. Thus, the report concludes by identifying and describing commonly-cited pitfalls of PBR.

Book Incentives to Improve Electric Utility Performance

Download or read book Incentives to Improve Electric Utility Performance written by Leland L. Johnson and published by . This book was released on 1985 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report uses material from a recent Arizona Public Service Company rate case, and published literature, to address several issues generic to the electric utility industry: the effects on utility incentives and on rates to customers of including "construction work in progress" (CWIP) in the rate base; the use of prudence tests by regulators to determine what costs should, and which should not, be passed on to ratepayers; and the use of incentive programs, with explicit rewards and penalties, to reduce the construction costs of large power plants and to improve their operating performance after they go into service. It draws three major conclusions: (1) Economic principles do not support the notion that cost recovery from ratepayers should begin only after a plant is used and useful. (2) Traditional accounting practices produce rate shocks that force prices upward at the very time that the costs of using a plant are declining. Putting CWIP in the rate base is one of the ways rate shocks can be reduced. (3) Although including CWIP in the rate base may generate perverse incentives, the exclusion of CWIP from the rate base can also generate perverse incentives for utilities faced with severe cash flow problems.

Book Smart Power Anniversary Edition

Download or read book Smart Power Anniversary Edition written by Peter Fox-Penner and published by Island Press. This book was released on 2014-09-16 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Few industries in the U.S. are as stuck in the past as our utilities are. In the face of growing challenges from climate change and the need for energy security, a system and a business model that each took more than a century to evolve must now be extensively retooled in the span of a few decades. Despite the need, many of the technologies and institutions needed are still being designed or tested. It is like rebuilding our entire airplane fleet, along with our runways and air traffic control system, while the planes are all up in the air filled with passengers. In this accessible and insightful book, Peter Fox-Penner considers how utilities interact with customers and how the Smart Grid could revolutionize their relationship. Turning to the supply side, he considers the costs of, and tradeoffs between, large-scale power sources such as coal plants and small-scale power sources close to customers. Finally, he looks at how utilities can respond to all of these challenges and remain viable, while financing hundreds of billions of dollars of investment without much of an increase in sales. Upon publication, Smart Power was praised as an instant classic on the future of energy utilities. This Anniversary Edition includes up-to-date assessments of the industry by such leading energy experts as Daniel Estes and Jim Rogers, as well as a new afterword from the author. Anyone who is interested in our energy future will appreciate the clear explanations and the in-depth analysis it offers.

Book A Primer on Incentive Regulation for Electric Utilities

Download or read book A Primer on Incentive Regulation for Electric Utilities written by and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In contemplating a regulatory approach, the challenge for regulators is to develop a model that provides incentives for utilities to engage in socially desirable behavior. In this primer, we provide guidance on this process by discussing (1) various models of economic regulation, (2) problems implementing these models, and (3) the types of incentives that various models of regulation provide electric utilities. We address five regulatory models in depth. They include cost-of-service regulation in which prudently incurred costs are reflected dollar-for-dollar in rates and four performance-based models: (1) price-cap regulation, in which ceilings are placed on the average price that a utility can charge its customers; (2) revenue-cap regulation, in which a ceiling is placed on revenues; (3) rate-of-return bandwidth regulation, in which a utility's rates are adjusted if earnings fall outside a[open-quotes]band[close-quotes] around equity returns; and (4) targeted incentives, in which a utility is given incentives to improve specific components of its operations. The primary difference between cost-of-service and performance-based approaches is the latter sever the tie between costs and prices. A sixth, [open-quotes]mixed approach[close-quotes] combines two or more of the five basic ones. In the recent past, a common mixed approach has been to combine targeted incentives with cost-of-service regulation. A common example is utilities that are subject to cost-of-service regulation are given added incentives to increase the efficiency of troubled electric-generating units.

Book Electric Utility Rate Reform and Regulatory Improvement

Download or read book Electric Utility Rate Reform and Regulatory Improvement written by and published by . This book was released on 1976 with total page 1550 pages. Available in PDF, EPUB and Kindle. Book excerpt: