Stakeholders consider trade‑offs in frequency of backward‑looking rate reviews

Stakeholders reviewed how traditional backward‑looking rate reviews (base‑rate proceedings) interact with RACs and other PBR tools. Several participants noted that more frequent rate reviews reduce the regulatory lag and therefore reduce the period utilities operate under a set revenue requirement; conversely, extending the lag can strengthen utilities’ incentives to contain costs between reviews.

SCC staff said there is no clear resource advantage from their perspective between biennial and triennial reviews, though they acknowledged intervenors may have different resource constraints. Participants noted that settlements and stipulated agreements in rate cases frequently narrow contested issues and that settlements sometimes make it difficult to see the full evidentiary record on prudency questions. Laura observed that frequent litigated proceedings can disproportionately burden public advocates with finite budgets while utilities can spread litigation costs into rate recovery.

Some stakeholders argued that a longer period between rate reviews could embed cost‑containment incentives by leaving utilities exposed to business risk for a longer period; others cautioned that very long review gaps could impair regulatory responsiveness to rapid industry or legislative changes. The group did not adopt any formal schedule change and asked SCC staff to describe historical differences among review regimes for members who wanted deeper background.

The meeting moved on after participants requested follow‑up material and case examples for the group’s April meetings.