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U.S. Department of Energy
Office of Scientific and Technical Information

Automatic adjustment clauses: theory and application

Book ·
OSTI ID:6468156

Automatic-adjustment clauses have come into ever-increasing use as fuel costs and the rate of inflation continue to escalate. The clauses have been attacked by the public as being moneymakers for the utilities. Still, automatic adjustment is seen as a practical and useful alternative to traditional methods for changing electric-utility rates - methods that are expensive, time-consuming, and often lag behind economic conditions. This book presents a critical examination of the historical and current application of automatic-adjustment clauses in electric-utility tariffs as an alternative to traditional ratemaking. Subjects dealt with include the positive and negative aspects of regulatory lag; the legal and economic restraints under which regulatory agencies and regulated firms must operate; use of automatic-adjustment clauses to mitigate the negative effects of regulatory lag and to promote managerial efficiency; current problems associated with automatic-adjustment clauses; fuel-adjustment clauses in the context of the National Energy Act (PURPA); and an in-depth analysis of the fuel-adjustment clauses of Ohio North Carolina, and Connecticut. 263 references, 7 figures, 1 table.

OSTI ID:
6468156
Country of Publication:
United States
Language:
English