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Partial passthrough (incentive) fuel clauses

Journal Article · · Public Util. Fortn.; (United States)
OSTI ID:5429930
New York and California rulings illustrate the case for partial passthrough fuel adjustment clauses. The recent trend toward incentive fuel clause mechanisms appears to provide a reasonable way for state utility commissions to secure adequate utility service at minimum cost while protecting the investments made for that purpose. Arguments against incentive fuel clauses include their variance with traditional notice rate making and due process, which were the bases for suits in New Mexico and Texas. By requiring shareholders to absorb part of the risk, the commission opens itself up for charges of arbitrariness and unlawful confiscation. Without incentive fuel clauses, however, the commission may have no check on a company's fuel procurement procedures and management efficiency other than a costly review. Despite the trend, incentive fuel clauses have yet to be seriously tested in the judicial system.
OSTI ID:
5429930
Journal Information:
Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 116:3; ISSN PUFNA
Country of Publication:
United States
Language:
English