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Vermont committee hears primer on how utilities’ rates are set and alternative regulation tools
Summary
Legislative Counsel Maria Royal told the House Energy and Digital Infrastructure Committee that rate cases—where utilities seek to recover costs and an allowed return—are often long and contested, and that Vermont also uses alternative or incentive regulation for some companies to align utility incentives with public goals.
Maria Royal, legislative counsel for the Vermont Legislature, told the House Energy and Digital Infrastructure Committee on Jan. 22 that rate-setting for monopoly utilities aims to ensure rates are “just and reasonable,” and typically lets utilities recover prudent costs plus an allowed return on investment.
Royal said rate proceedings can be lengthy and fact-heavy because they examine whether investments were prudent, used and useful, and necessary for service. “Rate making is probably the most complicated and oftentimes the most contested proceeding,” she said.
The committee was given a plain-language…
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