Appendix 3 Appendix 3: Utility Lost Revenue Recovery Mechanisms in the Midwest State
Citation
Lost Revenue Recovery Mechanism
Illinois
Dockets 07-241 & 07-242
There are no policies to support decoupling for electric utilities. However, North Shore Gas (Docket 07-241) and People Gas (Docket 07-242) were approved for revenue-per-customer pilot programs in February 2008.
Indiana
170 IAC 4-8-6
The Commission may allow the utility to recover the utility’s lost revenue from the implementation of a demand-side management (DSM) program sponsored or instituted by the utility. The calculation of lost revenue must account for the impact of free riders and the changes in the number of DSM program participants between base rate changes and on the revised estimate of a program-specific load impact that result from the utility’s measurement and evaluation activities. The Commission may periodically review the need for continued recovery of the lost revenue as a result of a utility’s DSM program.
Iowa
NOI-06-1
The Iowa Utilities Board considered decoupling for natural gas utilities and determined that it would consider automatic adjustment mechanisms or other rate design changes on a case-by-case basis.
Kansas
Final Order in 08-GIMX-441-GIV
The Kansas Corporation Commission (KCC) indicated in the final order that they would consider gas decoupling on a case-by-case basis. The KCC found that it has the broad authority to provide for performance incentives for energy efficiency programs, but has either rejected incentives when they have been proposed, or proposals have been withdrawn before a Commission ruling. No decoupling plans or performance incentives have been approved for any utility.
Kentucky
278.285
Allows utilities to include in customer bill surcharge the projected revenues lost as a result of approved costeffective energy efficiency programs.
Michigan
Public Act 295
Allows natural gas utilities to request a symmetrical revenue decoupling mechanism as long as they are spending at least 0.5% of total revenues on energy efficiency programs. The law, however, does not mention electric utilities. The Michigan Public Service Commission previously authorized several electric decoupling pilots, but the Michigan Court of Appeals ruled in April 2012 that the Commission had no explicit statutory authority to implement decoupling for electric providers.
Minnesota
Minn. Stat 216B.2412
The Next Generation Energy Act of 2007 directed the Public Utilities Commission (PUC) to allow pilot programs to assess decoupling. In June 2009, in Docket E, G-999/CI-08-132, the MN PUC issued an order adopting the criteria and standards for decoupling pilots. Utilities were required to file notice of intent to file a decoupling pilot by June 1, 2010 and all proposals had to be filed by December 30, 2011. Two gas utilities, CenterPoint Energy and Minnesota Energy Resources Corporation, have received approval from the Commission to implement decoupling pilots in Docket Nos. G008/GR-08-1075 and G007, G011/GR-10977, respectively. Though the statute authorizes decoupling for electricity, no decoupling pilots have been proposed or implemented by electric utilities.
Missouri
393.1075 RSMo. Cum. Supp. 2010
Provide timely earnings opportunities associated with cost-effective, measurable, and verifiable efficiency savings. The Missouri Public Service Commission has approved decoupling for gas utilities Atmos Energy and Missouri Gas Energy.
Nebraska
All electric utilities in Nebraska are either public power districts or cooperatives. Lost revenue charges, surcharges, or extra returns are not necessary for public power and nonprofit cooperatives to adopt costeffective energy efficiency rates and programs.
North Dakota
Docket PU-06-525
Decoupling approved in natural gas rate design case for Xcel Energy.
Ohio
OAC 4901:1-39-07
Allows recovery of “appropriate” lost distribution revenues. An electric distribution utility may apply to the Public Utilities Commission of Ohio for approval of a revenue decoupling mechanism. However, gas utilities haven’t been allowed to implement a true decoupling mechanism. Instead, they’ve been permitted to use straight-fixed-variable rate designs. These decisions are determined on a case-by-case basis for both electric and gas utilities. Duke Energy Ohio recovers lost revenues resulting from its portfolio of energy efficiency programs through the DSM rider. Dayton Power & Light currently has a case pending. AEP Ohio chose not to seek lost revenue recovery in their prior rate case.
South Dakota
Docket GE09-001
In 2010, the South Dakota Public Utilities Commission authorized a lost revenue adjustment mechanism for Northwestern Energy for both gas and electric efficiency programs.
Wisconsin
Dockets 6680-UR-116 and 6690-UR-119
In December 2008, decoupling was approved for the Wisconsin Public Service Corporation, which, specified as a “Revenue Stabilization Mechanism,” allowed the utility to pursue a four-year pilot program. This pilot ended in 2012.
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