Rate discounts pave the way for restructuring

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

OSTI ID:229902

Cross, P S

There has been much attention paid to revolutionary rate-reform plans advanced to meet perceived competition in energy markets. So much, in fact, that the increasing popularity of the special discount rate has gone virtually unnoticed. This traditional ratemaking mechanism has found new favor with state regulators as a tool to keep customers on the system. Many states have allowed utilities flexibility to lower prices for large customers where they can show that the customer is likely either to move operations out of state or generate power on its own, usually through cogeneration. Gas utilities also have been granted permission to discount rates for customers with an ability to switch to another boiler fuel, such as oil. Although many state regulators have embraced rate discounts, some parties have questioned the authority of state regulators to allow regulated companies to change rate without complying with full-fledged tariff procedures. Customers who do not qualify for the discounts have also made allegations of improper discrimination among rate classes. Recent court ruling have upheld the regulator`s authority for granting such discounts. Additionally, some customers feel that a utility may attempt to maximize sales by discounting rates for elastic customers at the expense of their captive customers.

• OSTI ID: 229902
• 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
DEREGULATION
ELECTRIC POWER INDUSTRY
GAS UTILITIES
PRICING REGULATIONS
RATE STRUCTURE