CWIP: meat-ax regulation
The significance of a pending Federal Energy Regulatory Commission (FERC) ruling on the issue of whether construction work in progress (CWIP) can be included in utility wholesale-rate bases will be matched by how the new chairman, C. Michael Butler III, perceives his regulatory powers. CWIP challenges the used and useful principle that facilities that are not providing service should not charge ratepayers. Exceptions to the rule to finance pollution control, fuel conversion, and to relieve utilities in severe financial distress began in 1976. The financial distress test is the focus of current challenges. A proposal to peg CWIP rate approval to stock or bond ratings raises the question of whether FERC or financial institutions are the regulators. A review of the utility industry's financial condition, the factors that are causing financial distress, and the costs and benefits of CWIP favor a stronger assessment by FERC than is planned. (DCK)
- OSTI ID:
- 6755142
- Journal Information:
- Public Power; (United States), Journal Name: Public Power; (United States) Vol. 40:2; ISSN PUPOA
- Country of Publication:
- United States
- Language:
- English
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