December 2017
Dr. Lowry filed testimony December 21st in Minnesota on behalf of Northern States Power-Minnesota. NSPM recently began operating under a multiyear rate plan. The Minnesota Public Service Commission convened a hearing to review the company's performance metric system and consider new performance metrics and targeted performance incentive mechanisms. Dr. Lowry reviewed NSPM's regulatory system and discussed appropriate adjustments to the performance metric system.
Also in December, PEG Research won a competitive bid to advise the Ontario Energy Board on a new multiyear rate plan for Ontario gas utilities. Enbridge Gas Distribution and Union Gas have proposed a merger and an unusual ten-year rate plan. Their filing includes testimony on a productivity study deemed pertinent in the choice of an X factor for the proposed revenue cap index. PEG will review this evidence and, if warranted, prepare an alternative study and file testimony in the proceeding.
October 2017
Mark Newton Lowry filed extensive testimony for Xcel Energy in a Colorado rate proceeding which is accessible here. Public Service of Colorado is proposing a multiyear rate plan ("MRP") for its electric services in the proceeding. The plan includes revenue decoupling. Colorado's Public Utilities Commission recently approved revenue decoupling for the company's electric services but did not approve any mechanism for escalating the revenue requirement. Dr. Lowry's testimony discusses general merits of MRPs for electric utilities under today's business conditions and appraises the specific rate plan proposed by Public Service. His evidence includes statistical benchmarking of the company's proposed revenue requirements for the four years of the plan. The need for automatic revenue escalation when electric utilities operate under revenue decoupling is discussed with supportive empirical evidence.
Dr. Lowry gave a presentation on performance based regulation on October 10th at the Wisconsin Public Utilities Institute's Energy Utility Basics Course. On October 31, he conducted a seminar on his research at the Department of Applied Economics at the University of Wisconsin. Dr. Lowry is an alumnus of the department.
September 2017
PEG Research LLC has won a competitive bid to assist the Ontario Energy Board with a Hydro One Networks ("HON") rate filing. HON is Ontario's largest power distributor. The company has proposed a custom incentive regulation ("IR") plan. The Board requires utility custom IR proposals to be supported by statistical benchmarking and productivity evidence. HON has submitted a report on its productivity growth along with several benchmarking studies. PEG will review the benchmarking and productivity evidence and prepare testimony in the proceeding if needed.
Also in September, Dr. Lowry spoke at a training session on Distribution Systems and Planning for the New England Council of Public Utility Commissioners in Hallowell, Maine. The session was organized by the Grid Modernization Laboratory Consortium of the U.S. Department of Energy. Dr. Lowry spoke on Regulation of Modernizing Power Distributors: Results from Research on Performance Based Regulation.
August 2017
Dr. Lowry gave a webinar for Lawrence Berkeley National Laboratory August 4th to discuss results of his recent research paper for the lab on multiyear rate plans for U.S. electric utilities. Also in August, he served as an instructor at the Edison Electric Institute's Electric Rates Advanced Course in Madison WI. He presented a session on Alternative Regulation and supervised an Altreg workshop.
July 2017
Lawrence Berkeley National Laboratory has issued a report by PEG Research on Performance-Based Regulation Using Multiyear Rate Plans for U.S. Electric Utilities.
Multiyear rate plans ("MRPs") are a comprehensive approach to performance-based regulation that is popular in Canada, Britain, and many other countries overseas. Their use is growing in the United states, especially for vertically integrated electric utilities. The paper, available here
, details key plan design issues, presents several case studies, and considers the impact of MRPs on electric utility performance. Results are presented on the recent growth in the productivity of 86 U.S. utilities in the provision of power distributor services. The research suggests that utilities operating under well-designed MRPs (and, more generally, infrequent rate cases) tend to achieve better operating performance.
June 2017
Green Mountain Power has retained Pacific Economics Group to assist it in the development of a new regulatory strategy. Vermont's largest electric utility, an affiliate of Montreal-based Gaz Metro, is a national leader in the transition to cleaner sources of energy. The Company announced its intent to develop a new regulatory system in recent testimony. With PEG's assistance, it will participate in a collaborative process initiated by the Department of Public Service to consider new approaches to regulating Vermont electric utilities.
Mark Newton Lowry filed extensive testimony June 2 in support of a multiyear rate plan ("MRP") for the gas division of Public Service of Colorado. Public Service is a unit of Xcel Energy and one of the largest U.S. gas utilities. Dr. Lowry discussed general merits of MRPs and appraised the specific plan proposed by Public Service. His appraisal included statistical benchmarking of the company's proposed revenue requirements for O&M expenses and total cost during the three years of the plan. He also reported recent trends in the productivity of U.S. gas distribution utilities. The testimony and report can be found here.
May 2017
Mark Newton Lowry participated in a National Regulatory Research Institute webinar on multiyear rate plans. The webinar discussed Ken Costello's recent NRRI white paper on these increasingly popular plans. PEG congratulates Ken on his recent selection by the Financial Research Institute to receive the 2017 Crystal Award. The award was created to recognize an individual who has made outstanding and sustained contributions to the design, implementation, or analysis of public utility regulatory policy.
Dr. Lowry also spoke at the National Conference of Regulatory Attorneys in Portland, Oregon. The theme of the conference, held May 7- May 10, was New Horizons - The Future of Utility Regulation
. Dr. Lowry discussed his paper, nearing completion, on multiyear rate plans for US electric utilities. The work is funded by Lawrence Berkeley National Laboratory of the U.S. Department of Energy.
April 2017
The Regie de l'Energie in Quebec issued its long-awaited decision on PBR for the power distributor services of Hydro Quebec. The Regie has directed the company to operate under a four-year multiyear rate plan featuring a revenue cap index. The index will reflect input price inflation, customer growth, and trends in the multifactor productivity of power distributors. The company has also been directed to develop an incentive mechanism for its power procurement services. The plan largely conforms to the recommendations of Mark Newton Lowry, an expert witness in the proceeding.
PBR is required in Quebec by provincial statute. The statute states the goals of PBR to be
- continuous improvement in utility operating performance
- sharing of benefits
- streamlining of the regulatory process.
February 2017
Mark Newton Lowry filed testimony February 24th on incentive regulation for the power transmission services of Hydro-Quebec. Provincial law requires regulation of the company's transmission and distribution services. Designing an incentive regulation mechanism for transmission is especially challenging since there are few precedents for this in North America. Dr. Lowry proposes a multiyear rate plan with revenue escalated between rate cases by an index or "California-style" hybrid methodology.
January 2017
Mark Newton Lowry and Tim Woolf of Synapse Energy Economics addressed the Technology and Economic Development Committee of the Washington State House of Representatives January 31. They discussed their recent research on performance-based regulation for Lawrence Berkeley National Laboratory.
January 2017
Dr. Charles Cicchetti and Colin Long have joined Berkeley Research Group ("BRG") as Managing Directors. Both were founding members of Pacific Economics Group and were Senior Advisors to PEG Research LLC. Questions about the transition can be addressed to Colin Long at clong@thinkbrg.com or 213.261.7696. We wish Charlie and Colin the very best in their new endeavor.
