Wednesday, May 2, 2018

House Passes Alternative Ratemaking Bill To Encourage Conservation, Renewable Energy

The House Tuesday passed House Bill 1782 (Delozier-R-Cumberland) authorizing alternative ratemaking for electric and natural gas distribution companies to encourage energy efficiency improvements, distributed and renewable energy projects
“It is imperative that our electric grid is safe and reliable,” said Rep Sheryl Delozier. “Electric utilities invest billions of dollars annually to meet protect the integrity of the distribution network and improve the delivery system in order to meet everyone’s needs for safe, affordable and reliable service.
“As customers begin to generate their own electricity through solar and other means, the grid and service must still be maintained,” she said.  “My legislation allows electric companies to change to alternative ratemaking to keep the lights on. Over 30 states have done some form of alternative ratemaking.”
The bill would allow the Public Utility Commission to approve the use of alternate ratemaking mechanisms by utilities. This bill does not add to the amount a company is approved to earn or recover from ratepayers. This continues to be determined by the PUC. It also does not change the type of costs that may be recovered by a utility through rates.
The bill clarifies the PUC’s authority to approve the use of alternative rate mechanism. These mechanism could be used to recover capital costs and expenses to provide service as they do now, and the PUC retains the ability to approve such recovery.
Alternate ratemaking includes decoupling, performance-based rates, formula rates and multiyear rates. Under the bill, customers must be informed of a utility’s application to deploy these types of rates.
The bill now goes to the Senate for consideration.  A House Fiscal Note and summary is available.
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