Mark Newton Lowry, David A. Hovde, Rebecca Kavan, Matthew Makos
{"title":"Impact of multiyear rate plans on power distributor productivity: Evidence from Alberta","authors":"Mark Newton Lowry, David A. Hovde, Rebecca Kavan, Matthew Makos","doi":"10.1016/j.tej.2023.107288","DOIUrl":null,"url":null,"abstract":"<div><p>Multiyear rate plans (“MRPs”) are an increasingly popular alternative to traditional utility ratemaking in North America. Rate cases are less frequent, and an attrition relief mechanism (“ARM”) escalates revenue between rate cases on some basis other than the utility’s contemporaneous cost growth. An approach to ARM design has developed in North America that is based on price and productivity indexing. Evidence filed in support of indexed ARMs frequently includes studies of the efficiency of subject utilities. Stronger utility performance incentives are a theoretical advantage of MRPs but few empirical studies have quantified this advantage. A proceeding in Alberta, where indexed ARMs are used, has yielded evidence that MRPs can accelerate utility productivity growth.</p></div>","PeriodicalId":35642,"journal":{"name":"Electricity Journal","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Electricity Journal","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1040619023000556","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"Social Sciences","Score":null,"Total":0}
引用次数: 0
Abstract
Multiyear rate plans (“MRPs”) are an increasingly popular alternative to traditional utility ratemaking in North America. Rate cases are less frequent, and an attrition relief mechanism (“ARM”) escalates revenue between rate cases on some basis other than the utility’s contemporaneous cost growth. An approach to ARM design has developed in North America that is based on price and productivity indexing. Evidence filed in support of indexed ARMs frequently includes studies of the efficiency of subject utilities. Stronger utility performance incentives are a theoretical advantage of MRPs but few empirical studies have quantified this advantage. A proceeding in Alberta, where indexed ARMs are used, has yielded evidence that MRPs can accelerate utility productivity growth.
Electricity JournalBusiness, Management and Accounting-Business and International Management
CiteScore
5.80
自引率
0.00%
发文量
95
审稿时长
31 days
期刊介绍：
The Electricity Journal is the leading journal in electric power policy. The journal deals primarily with fuel diversity and the energy mix needed for optimal energy market performance, and therefore covers the full spectrum of energy, from coal, nuclear, natural gas and oil, to renewable energy sources including hydro, solar, geothermal and wind power. Recently, the journal has been publishing in emerging areas including energy storage, microgrid strategies, dynamic pricing, cyber security, climate change, cap and trade, distributed generation, net metering, transmission and generation market dynamics. The Electricity Journal aims to bring together the most thoughtful and influential thinkers globally from across industry, practitioners, government, policymakers and academia. The Editorial Advisory Board is comprised of electric industry thought leaders who have served as regulators, consultants, litigators, and market advocates. Their collective experience helps ensure that the most relevant and thought-provoking issues are presented to our readers, and helps navigate the emerging shape and design of the electricity/energy industry.
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