Guidelines for granting industrial {open_quotes}distress{close_quotes} rate discounts

Journal Article · Sun Jan 15 04:00:00 EST 1995 · Fortnightly

OSTI ID:229898

Carlson, R L ^[1]; Sipe, D J

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1. Goodman Group, Ltd., Boston, MA (United States)

Increasingly seen are electric utilities offering discounted rates to targeted customers or classes to offset rising competition. These offers often come from utilities with surplus generating capacity and high industrial rates. With excess capacity, marginal costs fall below rates, allowing the utility to profit by offering discounts for incremental sales. Today, utilities in twenty states offer discounts; with this number likely to increase as regulation evolves towards price caps and flexible pricing. Rate discounts usually fall into three categories: load retention, economic development, or cogeneration deferral. Load retention discounts are often given to industries who are in economic distress, but this distress is often difficult for the utility to determine. Given are several strategic alternatives for utility discounts; including weighing the electric intensity of the industry, the length of the discount, revenue guarantees, and revenue sharing.

• OSTI ID: 229898
• Journal Information: Fortnightly, Journal Name: Fortnightly Journal Issue: 2 Vol. 133; ISSN FRTNE8
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
COGENERATION
COMPETITION
ECONOMIC DEVELOPMENT
ELECTRIC UTILITIES
ENERGY CONSUMPTION
INDUSTRY
MARGINAL-COST PRICING
RATE STRUCTURE
SALES