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Ratemaking and Rate Structure: New Paradigms Part Three – New Ratemaking Models

In Part One, we looked at the challenges that utilities face related to the increased expenses that are required to introduce “grid modernization,” which is more and more being expected by policymakers – legislatures and regulatory bodies. In Part Two, we looked at the second challenge – how utilities are expected to come up with this extra money while often facing declining revenue as a result of reduced utility-generated power demand from customers. Here, we look at new trends in ratemaking – and how some of these forward-looking models might actually allow utilities to receive the rates they need in order to address both challenges.

 

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