Regulator calls on electric utilities to evolve
Behind closed doors, electric utilities grumble about Pennsylvania’s requirements to reduce energy demand, said Pennsylvania Public Utility Commissioner Robert Powelson.
He doesn’t fault them for it.
“They don’t like that we’re asking them to go to their customers and say use less of my product,” he said. “I get that.”
Saving energy means cutting revenue, because what a company charges to deliver electricity is based on how much of it travels through its system. That’s how it’s always been, before energy efficient appliances and renewable energy installations challenged the model.
Now, Mr. Powelson is challenging the industry to evolve and embrace what’s known in the utility business as decoupling. One way to do that is to base electric rates on the cost of operating the distribution system, regardless of how much energy travels through it.
Decoupling would help utilities cope with customers who put up solar panels and pull less electricity from the grid but still require the utility to maintain the electric lines running to their homes, said Rob Altenburg, director of PennFuture Energy Center. Utilities could structure their rates to reflect that actual cost of maintaining their infrastructure, regardless of how much it is used.
Nearly a decade ago, the PUC charged a working group with studying the issue of decoupling. The result was a mixed bag, with environmental groups recommending it, consumer advocates opposing it and the utilities wanting to leave the door open without any state mandates.
