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There Will Be Rate Increases and Reform

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Nevelyn Black's picture
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Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

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“Six percent doesn’t sound like a lot, but it is an extra six percent…it is an extra cost,” said local attorney, Leah Mason. Kentucky Electric Cooperatives are trying to warn customers about that 6 percent increase that will start January 1.  Natural gas and electricity will be taxable and utility customers will see an increase on their bill unless they complete an exemption form.  “I didn't even know that this form existed until yesterday,” said customer Kim Holloway.  Like many property owners, Holloway qualifies for exemption on her primary residence but will be taxed for any additional properties.  “Our utility bill is going to increase about $42 a month, which doesn't sound like a whole lot, but we're going to be paying in other ways also. It just all adds up,” Holloway said.  Scott Adair, with Jackson Purchase Electric Cooperative said, “The gold standard would be that everybody fills that form out. Certainly those folks that have multiple residential accounts need to fill those out so that those aren't mistakenly taxed.”

Utilities bear the burden of letting customers know about rate changes and typically, they aren’t well received.  Adair says the co-op will launch a campaign to help make customer aware of the changes.  In Minnesota, getting approval for an increase been more challenging than getting the word out.  In fact, Xcel tabled their proposal after ratepayer advocates and two state agencies opposed the $122 million rate increase.  Minnesota’s PUC said customers are already suffering from energy price inflation.  Predicting that a rate increase of that size would not be approved, Xcel dropped their original request and proposed an alternative plan.   The new plan would offset 2023 costs by making changes in accounting for certain costs and revenue.  ”On balance, this is a thoughtful way to move forward without an interim rate increase," PUC Commissioner Matt Schuerger said at the meeting.

The Public Utility Commissions (PUC) in each state regulate utilities and their primary goal is to make sure the consumer receives electricity at an affordable rate.  These responsibilities have presented a real dilemma for Texas’ PUC.  After the 2021 winter storm, the agency made it clear they would be taking a more active role in the oversight of ERCOT and market participants.  However, their PUC is facing a great feat; improving the grid, adapting to its new structure, establishing a new relationship with ERCOT and managing multiple legal battles.  The PUC in Texas certainly has it’s work cut out.  A report by the Sunset Advisory Commission defined six issues in connection with their oversight of ERCOT.  (1) Without additional resources and clear-decision-making process in place, the PUC cannot truly fulfill expectations for ensuring a reliable grid. (2) To restore trust, the PUC needs to further improve its public communications efforts. (3) The PUC needs additional resources and attention focused on its water and wastewater regulation to avoid overburdening utilities and their customers.  (4) The PUC’s poor data practices and lack of policies and procedures limit its ability to best allocate resources and serve the regulated community.  (5) Texas has a continuing need for the PUC. (6) The state has a continuing need for the Office of Public Utility Counsel (OPUC), but the agency should strengthen its process for contracting with legal expert witnesses.  The report concluded that the recommendations to resolves these issues would required additional funding.  As usual, deciding who will cover the costs continues to be the number one concern.

How are utilities navigating reforms, changes in oversight, state regulations and increasing costs?   

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