UTILITY INCENTIVES AND STATISTICAL RECOUPLING - AN EMPIRICAL-ANALYSIS

The current system of regulating electric utilities in the U.S. provid es rewards for selling more electricity. Conversely, utilities are pen alized for running even the most cost-effective, energy-efficiency pro grams because these programs reduce sales and, thus, decrease utility earnings and profits. A number of mechanisms have been developed to ad dress this problem. We report on a systematic evaluation of one approa ch, called statistical recoupling, for resolving the problem. Data for the Utah service territory of Utah Power and Light are used to estima te the revenue impacts of the methodology if it had been in place duri ng 1993 and 1994. Copyright (C) 1996 Elsevier Science Limited.