Rate design objectives and realities

Journal Article · Thu May 06 04:00:00 EDT 1976 · Public Util. Fortn.; (United States)

OSTI ID:7186070

Galligan, R A

It is now recognized by various special-interest groups that within the broad parameter of a total revenue figure, utility rates can be used as a tool to achieve numerous objectives. The 1975 Northern States Power Company electric rate case in Minnesota is cited as a case in point: three intervening parties offered comments on the traditional rate level issues and nine intervenors participated in the rate design phase of the hearings. What is really at stake are the differing group objectives that can be attained by rate design. The author identifies 15 of the not-always-compatible objectives and some of the implications. Among the objectives that can be achieved in the design of rates are: total revenues sufficient to cover total costs; and revenues from each class of customers sufficient to cover costs associated with serving each class. Others include rates which: reflect costs as costs that are actually incurred; give stable, long-run information to consumers making long-lived consumption decisions; encourage conservation of energy; encourage conservation of capital; yield capital for expansion; yield a return to investors for inflation; encourage the substitution of less scarce energy types for more scarce energy types; redistribute income among various segments of the population; reflect to consumers the true capital cost of providing utility service during peak periods; encourage a fuller utilization of fixed plant; attract industry; control the use of specific appliance; and will average over all customers of a utility, the effects of regional energy shortages. (MCW)

• Research Organization: Minnesota Public Service Commission
• OSTI ID: 7186070
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 97:10; ISSN PUFNA
• Country of Publication: United States
• Language: English

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CAPITAL
CHARGES
CONSTRUCTION
DATA
ECONOMICS
ELECTRIC POWER
ENERGY CONSERVATION
ENERGY CONSUMPTION
ENERGY SHORTAGES
ENVIRONMENTAL EFFECTS
FINANCIAL DATA
INFORMATION
INVESTMENT
POWER
POWER GENERATION
PROFITS
PUBLIC UTILITIES
REGIONAL ANALYSIS
REGULATIONS