Hemolytic Anemias Resuscitation in Adults

Recovery of Utility Fixed Costs: Utility, Consumer, Environmental and Economist Perspectives

“…208 Time-varying rates can partially or even fully remedy this problem. 209 Many experts identify time-varying pricing as a best practice for rate design.…”

“…259 Careful incentive design is necessary to avoid unintended consequences such as disputes around performance measurement 260 and potential strategic behavior or gaming on the part of utilities. 261 Going beyond performance-based incentives, comprehensive performance-based regulation also includes multiyear rate plans. Instead of filing a rate case every year or two, the utility operates under a rate plan that generally lasts four to five years.…”

“…275 Regulatory cost is markedly lower than frequent rate cases. 276 Formula rates can mitigate rate shock.…”

“…278 Costello emphasizes that the design of the earnings true-up mechanism is essential to the efficacy of an FRP, as it significantly impacts cost-containment incentives for the utility and the distribution of risks between utility stakeholders and utility customers. 279 For example, Costello notes that an FRP that reduces rates too quickly in response to cost reductions eliminates incentives for the utility to improve efficiency, while an FRP that allows a utility with poor cost management to immediately adjust rates upward to meet its target return on equity rewards the utility with essentially "cost plus" regulation.…”

“…150 For the same reason, potential cost savings from distributed generation and other distributed energy resources are lower, reducing their attractiveness 151 and leading the rooftop solar industry to oppose higher fixed charges. 152 On the other hand, higher fixed charges mitigate a disincentive for utilities to promote energy efficiency, since their revenues are less dependent on variable sales, 153 although the disincentive related to fewer investment opportunities persists.…”