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Stakeholders debate rate-adjustment clauses as a core PBR concern in Virginia
Summary
At a stakeholder meeting facilitated by the Virginia Department of Energy, participants focused on rate adjustment clauses and how those clauses affect incentives, risk allocation and the pace of investments in Virginia’s utilities.
At a stakeholder meeting facilitated by the Virginia Department of Energy, participants spent the largest portion of discussion examining rate adjustment clauses (often called RACs or “riders”) and how they interact with Virginia’s performance‑based regulation (PBR) options. State Corporation Commission (SCC) staff and a range of stakeholder organizations described RACs as mechanisms that typically recover specific project costs outside a utility’s base rate and are subject to a true‑up process.
Stakeholders said RACs reduce the financial risk to utilities because costs placed in RACs are trued up dollar‑for‑dollar, shifting downside risk from shareholders to customers. SCC accounting staff…
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