Can regulated rates be designed to mimic competition?

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… More Can regulated rates be designed to mimic competition?

Exit, Voice, and LP&L

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… More Exit, Voice, and LP&L

Power demand dropping? Must be time to raise prices!

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… More Power demand dropping? Must be time to raise prices!

Electric power rate reforms needed for smart grid to create value

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… More Electric power rate reforms needed for smart grid to create value

Arizona commissioners’ views on a non-jurisdictional utility’s cost-cutting plan

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… More Arizona commissioners’ views on a non-jurisdictional utility’s cost-cutting plan