ratemaking – Knowledge Problem

Can Regulated Rates Be Designed to Mimic Competition?

Electricity, Regulation / By Michael Giberson

Rather than attempting to “mimic competition,” Giberson suggested simply “to allow competition.” Cost-of-service rate regulation cannot be designed to mimic competition. If you want competitive results, then allow competition. At least that was my claim reported in a Megawatt Daily story, “Texas wires rate study draws mixed reactions.” (From Monday, June 27, 2106; articles are not …

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Exit, Voice, and Lp&l

1 Comment / Electricity, Energy markets, Politics, Regulation / By Michael Giberson

For many years Lubbock, Texas was the largest or among the largest cities with dual, competing electric utilities. If a consumer was unhappy with utility A, all it took was a phone call and about three days and the consumer would be hooked up to utility B. Standard economic theory suggests that such an arrangement …

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Power Demand Dropping? Must Be Time to Raise Prices!

4 Comments / Electricity, Energy markets, Regulation / By Michael Giberson

Michael Giberson News headline reflects the stark difference in pricing strategy between competing businesses and regulated monopolies: “Xcel: Slack demand signals need for rate hike.” The sub-headline reads, “The utility, which posted a profit increase, will ask Minnesota for approval to raise rates.” Profits are up? Must need to raise prices. Reading the article heightens the …

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Electric Power Rate Reforms Needed for Smart Grid to Create Value

1 Comment / Electricity, Regulation / By Michael Giberson

Michael Giberson In a white paper released yesterday, the Association of Home Appliance Manufacturers (AHAM) identified three requirements necessary for the smart grid to create value for residential customers: Pricing must provide incentives to manage energy use more efficiently and enable consumers to save money. Communication Standards must be open, flexible, secure, and limited in …

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Arizona Commissioners’ Views on a Non-jurisdictional Utility’s Cost-Cutting Plan

Electricity, Politics, Regulation / By Michael Giberson

Michael Giberson The Salt River Project is, among other things, a fairly substantial electric utility serving customers in the state of Arizona. As it is a state-chartered entity, not an investor-owned utility, it is not subject to regulation by the Arizona Corporation Commission. But that didn’t stop a couple of Arizona state commissioners from opining …

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