Decoupling of Utility Rates

These selected reference materials are listed by date and are in the form of pdf files unless otherwise noted. 

• June 22, 2007 -- D.P.U. 07-50: Investigation by the Department of Public Utilities on its own Motion into Rate Structures that will Promote Efficient Deployment of Demand Resources
• June 22, 2007 -- Energy Regulation in Massachusetts: Concerns and Options, by Paul Hibbard, Chair, Massachusetts Department of Public Utilities
• June 2006:
  • June 25, 2007 -- Patrick plans conservation to meet rising energy needs: more articles about clean energy and decoupling in Massachusetts
  • June 10-12, 2007 -- two articles about decoupling in Massachusetts
• April 26, 2007 -- Presentation on Decoupling, Fran Cummings (ppt file)
• April 2007 -- NY: PSC SEEKS MORE EFFICIENT ENERGY USE, Utility Revenue Decoupling Mechanisms to Eliminate Disincentives (press release on 07027/03-E-0640;06-G-0746)
  • “15 by 15” -- A Clean Energy Strategy for New York, April 19 Speech by Gov. Spitzer
• April 14, 2007 -- Saving power and profit: State seeks way for utilities to push conservation, not lose money, Boston Globe

• April 4, 2007 EPRI/STAC Massachusetts Stakeholder Conference Call:

  • Aligning Incentives with Public Policy, a presentation on Decoupling, Rick Weston, RAP (ppt file)
  • PEPCO Rate Stabilization Rider (1 page)
  • Click here for more info on EPRI/STAC Project (web)
• March 23, 2007 -- DTE 07-6 Order Opening Investigation by the Massachusetts DTE on its own motion into standby rates and alternative rate structures that will promote efficient deployment of DG
• February 2007 -- The Potential Benefits of DG and Rate-Related Issues that May Impede Their Expansion, A Study Pursuant to Section 1817 of the Energy Policy Act of 2005, US DOE
• October 2006 -- Aligning Utility Interests with

  Energy Efficiency Objectives, Kushlet et. al., ACEEE Report U-061

• September 2006 -- Divorcing Electricity Sales from Profits Creates Win-Win for Utilities and Customers, Stephen Heins, Orion Energy Systems, from energypulse.net
• August 2006 -- Aligning Regulatory Incentives with Demand-Side Resources, a workshop hosted by NARUC and EPA, selected presentations include:
  • Understanding the Ratemaking Implications of Linking Profits and Sales, David Moskovitz, RAP
  • Decoupling: Should Ratepayers Be Worried?, Simon Fitch, Washington State Attorney General’s Office
  • Examples of Decoupling Mechanisms, Jim Lazar
  • Decoupling in California: More Than Two Decades of Broad Support and Success, Roland Risser, PG&E
• June 2006 -- PPL case study and forecast simulation spreadsheet, referenced at the June 1 Workshop in Trenton, NJ (xls file, see related materials from MADRI and RAP)
• June 2006 -- Policy Statement in Support of DER Initiatives

• In addition to particular MADRI materials listed on this page, see the latest info at Mid-Atlantic Distributed Resources Initiative Working Group.

• May 2006 -- Electric Utility Revenue Stability Adjustment Factor (draft for MADRI Regulatory Sub-Group; check MADRI site for more recent postings), Wayne Shirley, RAP
• May 2006 -- The Value of DG under Different Tariff Structures, by Ryan Firestone et. al., LBNL-60589
• April 2006 -- Distributed Resources: Incentives, by NERA for EEI
• January 2006 -- Presentation on MADRI at the Massachusetts Symposium on Technical and Business Challenges for DG to Play a Role in T&D Planning, Rich Sedano of the Regulatory Assistance Project.
• Selection of recent MADRI options papers for use in January 25, 2006 Massachusetts Symposium
• 2006 -- EPA's Clean Energy-Environment Guide to Action:
  • Utility Incentives for Demand-Side Resources, section 6.2 of EPA's Guide
  • Removing Unintended Utility Rate Barriers to DG, section 6.3 of EPA's Guide
  • July 2006 -- Energy Efficiency Benefits Calculator, part of EPA's National Action Plan for Energy Efficiency, prepared by Energy and Environmental Econcomics, Inc. (one of the subcontractors to the EPRI DER Partnership):

  -- July 31 worksheet (2.7 MB excel file)

  -- link to worksheet on EPA website

  • see rest of Clean Energy-Environment Guide on EPA website
• December 2005 -- Rate Structures for Customers With Onsite Generation: Practice and Innovation, by Synapse Energy Economics and Regulatory Assistance Project, NREL/SR-560-39142

• December 2005 -- EPA and Next Generation of Energy Efficiency, Stacy Angel, EPA Climate Protection Partnerships, see "Decoupling" and other "Ratemaking" slides in this presentation to Minnesota

• November 2005 -- Electric Utility Revenue Stability Adjustment Factor (Draft 1 for MADRI Regulatory Sub-Group; check MADRI site for more recent postings), Wayne Shirley, RAP
• Presentation on the draft Model Revenue Stability Rate Rider, Wayne Shirley
• Excel file with example (xls)
• MADRI Weblog (see postings about Model Revenue Stability Rate Rider)
• October 2005 -- Decoupling White Paper #1, Presented for discussion at the Strategic Issues Forum, Rutgers Center for Energy, Economic and Environmental Policy

• September 2005 -- Designing Financial Incentives for Utility Involvement in Distributed Resources (Section 5), Gene Meehan, prepared by NERA for EEI (MADRI Business Case Sub-Group -- draft materials on "Alternative Models for Fostering Disco & 3rd Party DR Development;" more recent versions and other chapters may be available from MADRI)

• July 2005 -- Clean Solutions: What’s In It For Utilities?, David Moskowitz, RAP, presentation to NARUC ERE Committee

• July 2005 -- U.S. Energy Policy Act of 2005, Conference Report (1.6 MB pdf)
  • FERC EPAct implementation activities (web page)
• June 2005 -- MADRI Scoping Paper on the Throughput Issue: Addressing the Adverse Impact of Distributed Resources on Utility Earnings, F. Weston and W. Shirley, RAP
• June 2005 -- Distributed Resource Barriers, presentation by Wayne Shirley of RAP to NECA Conference

• May 2005 -- Framework for Developing Win-Win Strategies for Distributed Energy Resources in Massachusetts, EPRI, Attachment C of DG Collaborative's 2005 Report

• February 2005 -- DG in Oregon: Overview, Regulatory Barriers and Recommendations, Lisa Schwartz, Public Utility
  Commission Staff
• February 2004 -- Report on Utility Incentives Mechanisms for the Promotion of Energy Efficiency and System Reliability, Maine PUC, presented to the Utilities and Energy Committee
• January 2004 -- Massachusetts Symposium on Regulatory Frameworks for DG:

• Potential Regulatory Incentives & Frameworks, presented by Stan Blazewicz of Navigant Consulting (pdf)
• Presentations from several different stakeholder perspectives (web)

• October 2002 -- DR Distribution Credit Pilot Programs: Revealing the Value to Consumers and Vendors, RAP (NREL/SR-560-32499)
• December 2001 -- Breaking The Consumption Habit:  Ratemaking for Efficient Resource Decisions, Sheryl Carter, The Electricity Journal
• February 2000 -- Profits and Progress Through Distributed Resources, David Moskovitz
• November 1997 -- Performance-Based Regulation in a
  Restructured Electric Industry, for NARUC, by Bruce Biewald and Tim Woolf, Synapse Energy Economics, Inc. et.al.
• August 1994 -- Decoupling and Public Utility Regulation, R. Graniere et. al., The National Regulatory Research Institute
• June 1994 -- Regulatory Reform: Removing Disincentives to Utility Investment in Energy Efficiency, RAP
• January 1994, The Theory and Practice of Decoupling, Eto, J. et.al. (LBL-34555)
• Source materials on decoupling from NEEP's website (neep.org)

• Small Is Profitable, sections on Benefits of Distributed Resources and Policy Recommendations, Amory Lovins et. al.

Other Source Materials for Reference (web pages)

Additional information on regulatory issues for DG is available at:

• Overview of DG Rate Issues

Additional information on current activities in Massachusetts to develop a win-win regulatory framework can be found at www.masstech.org/dg/winwin.htm.  These activities include:

• EPRI-STAC DER Public/Private Partnership
• MTC Congestion Relief Pilots
• Distribution Planning Working Group

Related information from other states is available at:

• Decoupling Resources (web page of the NJ Center for Energy, Economic & Environmental Policy, CEEEP)
• Potential Win-Win Regulatory Frameworks: Related Policies in Other States

• DG Benefits and Costs

• Economics of Renewable DG

• Environmental Benefits and Impacts of DG

• Methodologies for Addressing DG in T&D Planning

Rate issues are subject to change through the regulatory process and through potential collaborative discussions, and this page and the linked pages are under revision. Suggestions for additional information and other comments or questions may be directed to:

          Fran Cummings, RET Policy Director