USC/PBR: A useful tool for a restructured world
The current period of electricity restructuring is becoming a transition within a transition. Movement in the direction of a more competitive marketplace is clear although the pace and depth of change in different state jurisdictions vary. Some states like California and more recently Massachusetts have moved more quickly and intensely in implementing change, each beginning with a strong policy statement and then attempting to address the details required to fulfill their broader mandates. It is at the second stage, where the details of the policy are being addressed, that the second transition develops. The need to resolve the tension between stranded cost recover and the desire to lower electricity rates becomes more pressing since this is the point where actual mechanisms are developed. There are solutions to this tension. one possible approach is a universal service charge (USC) combined with performance-based ratemaking (PBR) in other words a USC/PBR. Assuming that at least some degree of stranded cost recovery is recognized through the regulatory process, the USC is a mechanism for stranded cost recovery. It is a non-bypassable, end of the wires charge applied to all users of the distribution system. Although its name implies that it entitles a user access to service, that is not its purpose. Because it is applied to all distribution customers, it can also be used to collect social and environmental charges that regulators choose to impose upon users of the distribution system. It is clear that there are many policy choices to be made in the design of the USC. Some of these choices are discussed.
- OSTI ID:
- 121494
- Report Number(s):
- CONF-9509109-; TRN: 95:007744-0003
- Resource Relation:
- Conference: National Association of Regulatory Utility Commissioners (NARUC) national conference on electric competition and the public interest, Gatlinburg, TN (United States), 10-13 Sep 1995; Other Information: PBD: 1995; Related Information: Is Part Of Competition and the public interest: Addressing strandable benefits and strandable costs in a restructured electric industry; PB: 160 p.
- Country of Publication:
- United States
- Language:
- English
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