Net lost revenue from DSM: State policies that work
Abstract
A key utility regulatory reform undertaken since 1989 allows utilities to recover the lost revenue incurred through successful operation of demand-side management (DSM) programs. Net lost revenue adjustment (NLRA) mechanisms are states preferred approach to lost revenue recovery from DSM programs. This paper examines the experiences states and utilities are having with the NLRA approach. The paper has three objectives: (1) determine whether NLRA is a feasible and effective approach to the lost-revenue disincentive for utility DSM programs, (2) identify the conditions linked to effective implementation of NLRA mechanisms and assess whether NLRA has changed utility investment behavior, and (3) suggest improvements to NLRA mechanisms. Contrary to the concerns raised by some industry analysts, our results indicate NLRA is a feasible approach. Seven of the ten states we studied report no substantial problems with their approach. We observe several conditions linked to effective NLRA implementation. Observed changes in utility investment behavior occur after implementation of DSM rate reforms, which include deployment of NLRA mechanisms. Utilities in states with lost revenue recovery invest more than twice as much in DSM as do utilities in other states.
- Authors:
- Publication Date:
- Research Org.:
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Sponsoring Org.:
- USDOE, Washington, DC (United States)
- OSTI Identifier:
- 105876
- Report Number(s):
- CONF-950643-3
ON: DE95014034
- DOE Contract Number:
- AC05-84OR21400
- Resource Type:
- Conference
- Resource Relation:
- Conference: 7. national demand-side management conference: delivering customer value, Dallas, TX (United States), 28-30 Jun 1995; Other Information: PBD: [1995]
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 29 ENERGY PLANNING AND POLICY; 99 MATHEMATICS, COMPUTERS, INFORMATION SCIENCE, MANAGEMENT, LAW, MISCELLANEOUS; ELECTRIC UTILITIES; MANAGEMENT; STATE GOVERNMENT; REGULATIONS; SUPPLY AND DEMAND; ACCOUNTING; FINANCING; EVALUATION; INVESTMENT; FINANCIAL INCENTIVES; LEGAL INCENTIVES
Citation Formats
Baxter, L W. Net lost revenue from DSM: State policies that work. United States: N. p., 1995.
Web.
Baxter, L W. Net lost revenue from DSM: State policies that work. United States.
Baxter, L W. 1995.
"Net lost revenue from DSM: State policies that work". United States. https://www.osti.gov/servlets/purl/105876.
@article{osti_105876,
title = {Net lost revenue from DSM: State policies that work},
author = {Baxter, L W},
abstractNote = {A key utility regulatory reform undertaken since 1989 allows utilities to recover the lost revenue incurred through successful operation of demand-side management (DSM) programs. Net lost revenue adjustment (NLRA) mechanisms are states preferred approach to lost revenue recovery from DSM programs. This paper examines the experiences states and utilities are having with the NLRA approach. The paper has three objectives: (1) determine whether NLRA is a feasible and effective approach to the lost-revenue disincentive for utility DSM programs, (2) identify the conditions linked to effective implementation of NLRA mechanisms and assess whether NLRA has changed utility investment behavior, and (3) suggest improvements to NLRA mechanisms. Contrary to the concerns raised by some industry analysts, our results indicate NLRA is a feasible approach. Seven of the ten states we studied report no substantial problems with their approach. We observe several conditions linked to effective NLRA implementation. Observed changes in utility investment behavior occur after implementation of DSM rate reforms, which include deployment of NLRA mechanisms. Utilities in states with lost revenue recovery invest more than twice as much in DSM as do utilities in other states.},
doi = {},
url = {https://www.osti.gov/biblio/105876},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Sat Jul 01 00:00:00 EDT 1995},
month = {Sat Jul 01 00:00:00 EDT 1995}
}