Modernizing with Trackers
Time-tested cost recovery mechanisms provide stable funding for infrastructure replacement.
Automatic tracker surcharges provide timely cost recovery for multi-year utility system improvement programs.
rate case
Anomaly or New Normal?
Regulators weigh interest rate climate and future Fed policy in setting allowed return on equity.
(November 2013) Consumer advocates argue for lower allowed utility returns, to reflect lower financing costs. Our rate case survey shows mixed regulatory responses.
The Old Drawing Board
Portfolio planning in the age of gas.
PUCs are concerned that a rapid shutdown of coal-fired plants will start a full-tilt dash to gas—similar to the one that caused bankruptcies among independent power producers in the late 1990s and early 2000s. But this time around, ratepayers and not IPP investors will be stuck with the risk, if utilities rush to add all that new gas-fired capacity to rate base.
Pre-Funding to Mitigate Rate Shock
Re-starting the Big Build calls for revisiting cost-recovery mechanisms.
As the industry resumes major capital-spending programs, utilities and their stakeholders are rightly concerned about the effects on prices. Traditional regulatory approaches expose utilities to risks and costs, and can bring rate shock when capital spending finally makes its way into customers’ bills. Pre-funding investments can provide a smoother on-ramp to bearing the costs of a 21st-Century utility system — but it also raises questions for utilities to address.