Q4 2017 General Rate Case Update


Back by popular demand, EQ Research is serving up another quarterly summary of recent rate-case activities.

The U.S. map below indicates where rate cases for investor-owned electric utilities were active as of December 31, 2017. Scroll over any state to find out which utilities have pending rate cases in that state.

Twelve utilities filed new rate cases in Q4 2017. Of the 10 new rate cases that address rate design, all but two include proposals by utilities to raise their monthly fixed charge for standard residential service (see Figure 1). Four utilities proposed raising their residential fixed charge by 50% or more, with one utility — Otter Tail Power — aiming to boost its charge for North Dakota residential customers by a whopping 121%, from $8.00 to $17.70.

In Indiana, IP&L proposed elevating its monthly residential fixed charge from $17.00 to $27.00. And in Hawaii, Maui Electric proposed raising its monthly charge from $8.50 to $13.50, or nearly 60%.

The only two utilities that did not propose a higher residential fixed charge deserve special attention. First, in the District of Columbia, Pepco proposed creating a new demand charge of $1.447/kW for standard residential customers (Schedule R). Only a very small handful of utilities — including OG&E, in Oklahoma — have formally proposed to do so. Under Pepco’s proposal, the billing demand is the average of the maximum hourly demands recorded for each day of the billing month between the hours of 1 p.m. and 9 p.m.

Second, while Eversource Energy did not propose a higher residential fixed charge in its Connecticut rate case, Eversource noted in its filing that PURA was examining (in a separate proceeding) how to calculate a maximum residential customer charge (MRCC), adding that the outcome of that proceeding could impact Eversource’s current monthly fixed charge of $19.25. PURA has since approved a methodology that requires Eversource (and UI) to include only directly related costs in their customer charges at a sub-account level, preferably through direct assignment of assets and expenses when possible, and through cost allocation when direct assignment is not possible. If PURA approves a charge that allows for recovery of less than the full amount of the approved MRCC, the costs and expenses not recovered through that charge will be recovered via the residential volumetric charge. PURA also ordered Eversource (in its pending rate case) to file proposed residential customer charges consistent with the newly approved methodology.

Figure 1: Proposed Residential Fixed-Charge Increases — Rate Cases Filed in Q4 2017

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Eleven rate cases were decided in Q4 2017, as indicated in the figures below. Notably, in seven of those cases, state regulators did not allow increases exceeding 5% to the monthly fixed charge for residential customers, as indicated in Figure 2 below.

The other increases approved were modest, with the exception of Alaska Power’s rate case. In that case, the RCA allowed Alaska Power to raise its charge from $12.31 to $20.00 — the full amount proposed. Also, in keeping with recent tradition in Wisconsin, the PSC approved the full increase sought by Xcel Energy, allowing Xcel to raise its monthly charge from $14.00 to $17.00. Notably, Xcel’s charge in Wisconsin stood at just $8.00 two years ago.

In El Paso Electric’s rate case in Texas, the PUCT allowed EPE to impose a minimum monthly bill of $30.00 for new residential DG customers, including rooftop solar PV customers.

Figure 2: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – Rate Cases Decided in Q4 2017

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Figure 3: Existing vs. Proposed vs. Approved Residential Fixed Charge Increases – Rate Cases Decided in Q4 2017

© 2018 EQ Research