PaPUC to Explore Alternative Utility Ratemaking Methods

Today the Pennsylvania Public Utility Commission (PUC) announced it will hold a March 3, 2016 hearing in Harrisburg to gather information from experts regarding alternative ratemaking methodologies.puc_seal

Ratemaking alternatives, such as revenue decoupling, for example, could involve making consumer charges less dependent on usage. Decoupling advocates suggest that decoupling removes possible disincentives for greater energy efficiency because utility revenues are no longer directly linked to the volume of electricity or gas sold. Because of the importance of this topic, all five Commissioners will be sitting “en banc” – as a full panel – to receive information.

The hearing will focus on several issues:

  • Whether revenue decoupling or other similar rate mechanisms encourage utilities to better implement energy efficiency and conservation programs;
  • Whether such rate mechanisms are just and reasonable and in the public interest; and
  • Whether the benefits of implementing such rate mechanisms outweigh any costs associated with implementing the rate mechanisms.

“It is important for the Commission to foster public discussion about key issues,” said PUC Chairman Gladys M. Brown. “We look forward to receiving testimony which reflects a wide range of perspectives as the Commission studies ways to address potential barriers to energy efficiency and conservation programs in Pennsylvania while also maintaining the reliability and safety of our energy infrastructure.”

The hearing will be held on March 3, 2016, at 9 a.m., in Hearing Room 1 of the Commonwealth Keystone Building, 400 North Street, Harrisburg. The hearing is open to the public and we will also be video streaming the hearing on the Commission’s website for those unable to attend in person.

In a statement regarding recent rate case settlements, Commissioner Robert F. Powelson noted the increasing tempo of state and national discussions about other alternative ratemaking, commenting, “The time has come to better align rate structures in a way that equally benefits all stakeholders, including ratepayers, utilities and the environmental community.”

Note: In addition to the Commission’s en banc hearing, settlements regarding rate increase requests submitted by PECO Energy Company and PPL Electric Utilities Corporation both require that the utilities host public collaboratives on decoupling in early 2016.

A Secretarial Letter provides more details regarding the hearing and instructions for interested parties.

Desire more specific assistance regarding ratemaking, utility costs, renewable energy projects, or energy law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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