From Rate Case to Rooftop: A Glossary for Understanding Public Service Commissions
Public service commissions (PSCs) play a crucial role in regulating the services provided by utility companies, such as electricity, natural gas, and water. They are responsible for balancing the interests of both the consumers and the utility companies, ensuring that the services are reliable, affordable, and meet the needs of the community. However, understanding the inner workings of PSCs can be a daunting task, as they operate in a complex and highly regulated environment. To help demystify the world of PSCs, here is a glossary of key terms and concepts that will help you navigate through the various processes, from rate case to rooftop.
Rate Case
A rate case is a formal proceeding initiated by a utility company to request a change in the rates they charge their customers for their services. This process typically involves a thorough review of the company’s financial records and projections, as well as public hearings and input from various stakeholders. The outcome of a rate case can result in an increase or decrease in rates, depending on the PSC’s decision.
Consumer Advocate
A consumer advocate is an independent entity appointed by the PSC to represent the interests of the consumers in rate cases and other proceedings. They act as a voice for the consumers and work to ensure that their needs and concerns are considered in the decision-making process.
Intervenor
An intervenor is an individual or organization that has a direct interest in a PSC proceeding and seeks to participate in it. Intervenors can include consumer groups, environmental organizations, and other stakeholders who want to provide input and influence the outcome of a proceeding.
Utility
A utility is a company that provides essential services, such as electricity, natural gas, and water, to customers. These companies are regulated by PSCs to ensure that they operate in the best interest of the public.
Cost of Service
The cost of service is the total amount of money that a utility company needs to cover its operating and capital expenses, plus a reasonable profit. The PSC considers the cost of service when determining the rates that a utility can charge its customers.
Base Rate
The base rate is the fixed portion of a customer’s utility bill that covers the cost of providing the service, such as maintaining infrastructure and paying employees. This rate does not include any additional charges or fees.
Fuel Adjustment Clause
The fuel adjustment clause is a mechanism that allows a utility company to pass on the costs of fuel used to generate electricity or provide other services to customers. This charge is typically adjusted periodically to reflect changes in fuel prices.
Demand Charge
The demand charge is a fee that is based on the maximum amount of electricity a customer uses during a billing period. It is designed to encourage customers to manage their energy usage during peak hours to reduce strain on the utility’s infrastructure.
Net Metering
Net metering is a billing arrangement that allows customers with rooftop solar panels or other renewable energy systems to receive credit for the excess electricity they generate and send back to the grid. This credit is then applied to their future utility bills.
Renewable Portfolio Standard (RPS)
A renewable portfolio standard is a policy that requires utilities to generate a certain percentage of their electricity from renewable sources, such as wind or solar. This helps to reduce reliance on fossil fuels and promote the use of clean energy.
Energy Efficiency Programs
Energy efficiency programs are initiatives implemented by utilities to help customers reduce their energy consumption and save money on their bills. These programs can include rebates for energy-efficient appliances, weatherization assistance, and energy audits.
Smart Meter
A smart meter is a digital device that measures a customer’s energy usage in real-time and communicates this information to the utility. This allows for more accurate billing and helps customers to track their energy usage and make more informed decisions about their consumption.
Net Neutrality
Net neutrality is the principle that all internet traffic should be treated equally, regardless of its source or content. PSCs play a crucial role in enforcing net neutrality regulations to ensure that consumers have access to a free and open internet.
As you can see, there are many moving parts in the world of PSCs. However, understanding these terms and concepts can help you make informed decisions about your energy usage and advocate for your interests as a consumer. PSCs are committed to promoting a fair and competitive marketplace for utility services, and by familiarizing yourself with these key terms, you can
