Report to the Federal Trade Commission on the use of automatic fuel-adjustment clauses and the fuel-procurement practices of investor-owned electric utilities. [Monograph]

Book · Sat Jan 01 00:00:00 EST 1977

OSTI ID:6654816

Electric utilities and inflation and the purpose of an Automatic Fuel Adjustment Clause (AFAC) are discussed in the introductory chapter. Chapter II explains how AFACs work and how important they have become in terms of utilities' revenue. Chapter III describes fuel procurement in general, with specific reference to pertinent provisions contained in the long-term coal contracts of six subpoenaed electric utilities. The chapter discusses the sharing of cost risks between utility companies and coal suppliers and the extent to which utilities have absorbed greater risks over the last several years. It also considers whether there is any evidence that the existence of residential AFACs has affected the use of certain contract provisions. Chapter IV discusses the impact of AFACs on prices paid for fuel purchased from outside suppliers. It provides several tests of whether utilities with AFACs have paid higher prices than utilities without such clauses. Chapter V describes the increasing degree of vertical integration by electric utilities into fuel production. It provides a test of the impact of vertical integration on the prices paid for fuel. Chapter VI describes state surveillance of AFACs and other fuel procurement practices. Finally, Chapter VII contains the summary and conclusions.

• OSTI ID: 6654816
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
ELECTRIC POWER
RATE STRUCTURE
ELECTRIC UTILITIES
REGULATIONS
CHARGES
COMMERCIAL SECTOR
COST
ECONOMIC POLICY
ECONOMICS
FINANCIAL INCENTIVES
FUELS
HEARINGS
INDUSTRY
PROFITS
RESIDENTIAL SECTOR
VERTICAL INTEGRATION
POWER
PUBLIC UTILITIES
296000* - Energy Planning & Policy- Electric Power
293000 - Energy Planning & Policy- Policy
Legislation
& Regulation