Florida Power Corp. has won approval for a three-year experiment to remove existing disincentives to investment in conservation programs by "decoupling" residential revenues from sales for ratemaking purposes. The mechanism permits customer surcharges and refunds if revenue levels vary from targeted levels.
The new mechanism relies on a per customer revenue target figure based on the allowed revenue and average residential customer count used in the company's last rate case. The target is then adjusted to account for projected per customer revenue growth and changes in personal income. According to the utility, the adjustments assign more of the economic risk to shareholders. Customer surcharges or refunds are permitted if revenue levels vary from targeted levels, but will only be implemented to the extent that company earnings remain within a specified range.