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A Rate Design to Increase Efficiency and Reduce Revenue Requirements

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Author Info
Boonin, David Magnus
Abstract

One decoupling approach, a Straight Fixed Variable (SFV) rate design, is a rational way to recover fixed and variable costs because it aligns pricing with variable and fixed cost causation, thereby removing the utility's profit sensitivity to reduced sales. The problem with SFV is that it reduces the variable charge to short-term variable cost, leading to overconsumption. Revenue-neutral energy efficiency "feebates" combining fees and rebates offer an economic incentive for consumer energy efficiency.

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Publisher Info
Article provided by Elsevier in its journal The Electricity Journal.

Volume (Year): 22 (2009)
Issue (Month): 4 (May)
Pages: 68-78
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Handle: RePEc:eee:jelect:v:22:y:2009:i:4:p:68-78

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This page was last updated on 2009-12-3.

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