Q1 2018 General Rate Case Update

Share

Highlights:

  • 10 utilities in 8 states initiated new GRCs in Q1 2018.
  • Proposed fixed-charge increases range from 0% to 260%.
  • 11 GRCs concluded in Q1 2018.
  • Approved fixed-charge increases averaged only 6%.
  • 39 GRCs were pending at the close of Q1 2018.
  • GRCs increasingly address DER initiatives, grid mod, new pricing models.

The interactive U.S. map below indicates where GRCs for electric utilities were active as of March 31, 2018. Scroll over individual U.S. states to find out which utilities have pending rate cases in those states.

In addition to major rate-design revisions, GRCs are increasingly encompassing proposals related to EVs, energy storage, distributed solar and other DERs; grid modernization; and new pricing models, including TOU rates. (EQ Research offers a service that summarizes new GRCs initiated by utilities.* Contact us at info@eq-research.com for details.)

Ten utilities initiated new GRCs in Q1 2018. All but one include proposals by utilities to raise their monthly fixed charge for standard residential service (see Figure 1). Five utilities proposed raising their residential fixed charge by 25% or more. The average increase proposed by utilities in these 10 new cases was 58%.

Notably, in Pennsylvania, UGI Electric, which is undergoing its first GRC in 22 years, aims to raise its residential fixed charge from $5.50 to $14.00, or 155%. And in New Jersey, PSEG seeks to raise its charge from $2.27 to $8.18, or 260%, over three years. PSEG also proposed a new decoupling mechanism — deemed a “Green Enabling Mechanism” (GEM) — that would decouple revenues from sales. According to PSEG, this new mechanism would encourage large-scale utility investments in efficiency, renewables and other clean technologies.

In Kansas, Westar Energy has proposed a mandatory three-part rate — including a demand charge — for newer residential DG customers.

In addition, the federal Tax Cuts and Jobs Act of 2017 (TCJA) has prompted utilities and state regulators around the country to review the new law’s impacts on utilities and ratepayers. Many states have already required utilities to share with ratepayers the economic benefits of the new law. Interesting, the benefits for ratepayers thus far primarily take the form of reduced volumetric rates. EQ Research is not aware of any reductions to fixed charges resulting from state regulatory actions addressing the TCJA.

Figure 1: Proposed Residential Fixed-Charge Increases – GRCs Filed in Q1 2018

Eleven rate cases were decided in Q1 2018. Significantly, in eight of those cases, state regulators did not allow residential fixed-charge increases exceeding 2%, as indicated in Figure 2 below. The average increase approved by regulators in these 11 cases was only 6% — compared to the average proposed increase of 27%.

Figure 2: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – GRCs Decided in Q1 2018

Figure 3: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – GRCs Decided in Q1 2018


* Summaries of individual GRCs are available in EQ Research’s Marketplace.