Customer involvement in rate cases: encouraging utilities to manage power cost risk.(POWER OUTLOOK: ENERGY COSTS AND TRENDS)

Publication: Energy User News

Publication Date: 01-MAY-05

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2005 Business News Publishing Co.

Large commercial and industrial (C&I) energy consumers actively seek the lowest power costs by regularly comparing the rates offered by their utility and third-party suppliers. However, C&Is often do not participate in the process that determines utility rates. Participating in rate setting cases is a form of early intervention negotiation that can be a very effective means to keep a lid on volatile power prices.

Public utility commissions (PUC) regulate utility rates so that they reflect the utility's cost of service. This cost of service is determined in large part by the utility's wholesale cost of power, which is determined by the utility's portfolio of power supply and demand-side management (DSM) options available to meet customer load.

Utilities make their portfolio selection decisions through a very public process in which the utility proposes and then locks in its power supply and demand management plan. This plan, known as an integrated resource plan (IRP), must meet the power requirements of the...

Read the full article for free courtesy of your local library.