A public utility company is an organization that maintains the infrastructure for a public service. Public utilities are subject to forms of public control and regulation ranging from local community-based groups to statewide government monopolies.
An electricity market is a system that enables the exchange of electrical energy, through an electrical grid. Historically, electricity has been primarily sold by companies that operate electric generators, and purchased by consumers or electricity retailers.
Municipalization is the transfer of private entities, assets, service providers, or corporations to public ownership by a municipality, including a city, county, or public utility district ownership. The transfer may be from private ownership or from other levels of government. It is the opposite of privatization and is different from nationalization. The term municipalization largely refers to the transfer of ownership of utilities from Investor Owned Utilities (IOUs) to public ownership, and operation, by local government whether that be at the city, county or state level. While this is most often applied to electricity it can also refer to solar energy, water, sewer, trash, natural gas or other services.
Price-cap regulation is a form of incentive regulation capping the prices that firms in a natural monopoly position may charge their customers. Designed in the 1980s by UK Treasury economist Stephen Littlechild, it has been applied to all privatised British network utilities. It is contrasted with both rate-of-return regulation, with utilities being permitted a set rate of return on capital, and with revenue-cap regulation, with total revenue being the regulated variable.
The Public Utility Regulatory Policies Act is a United States Act passed as part of the National Energy Act. It was meant to promote energy conservation and promote greater use of domestic energy and renewable energy. The law was created in response to the 1973 energy crisis, and one year in advance of a second energy crisis.
Energy demand management, also known as demand-side management (DSM) or demand-side response (DSR), is the modification of consumer demand for energy through various methods such as financial incentives and behavioral change through education.
Demand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply. Until the 21st century decrease in the cost of pumped storage and batteries, electric energy could not be easily stored, so utilities have traditionally matched demand and supply by throttling the production rate of their power plants, taking generating units on or off line, or importing power from other utilities. There are limits to what can be achieved on the supply side, because some generating units can take a long time to come up to full power, some units may be very expensive to operate, and demand can at times be greater than the capacity of all the available power plants put together. Demand response, a type of energy demand management, seeks to adjust in real-time the demand for power instead of adjusting the supply.
Negawatt power is investment to reduce electricity consumption rather than investing to increase supply capacity. In this way, investing in negawatts can be considered as an alternative to a new power station and the costs and environmental concerns can be compared.
A windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry.
Nova Scotia Power Inc. is a vertically integrated electric utility in Nova Scotia, Canada. It is privately owned by Emera and regulated by the provincial government via the Nova Scotia Utility and Review Board (NSUARB). Nova Scotia Power Inc provides electricity to 520,000 residential, commercial and industrial customers in Nova Scotia.
A power purchase agreement (PPA), or electricity power agreement, is a long-term contract between an electricity generator and a customer, usually a utility, government or company. PPAs may last anywhere between 5 and 20 years, during which time the power purchaser buys energy at a pre-negotiated price. Such agreements play a key role in the financing of independently owned electricity generators, especially producers of renewable energy like solar farms or wind farms.
Electricity pricing can vary widely by country or by locality within a country. Electricity prices are dependent on many factors, such as the price of power generation, government taxes or subsidies, CO
2 taxes, local weather patterns, transmission and distribution infrastructure, and multi-tiered industry regulation. The pricing or tariffs can also differ depending on the customer-base, typically by residential, commercial, and industrial connections.
An electric utility, or a power company, is a company in the electric power industry that engages in electricity generation and distribution of electricity for sale generally in a regulated market. The electrical utility industry is a major provider of energy in most countries.
The building block model is a form of public utility regulation that is common in Australia. Variants of the building block model are currently used in Australia in the regulation of electricity transmission and distribution, gas transmission and distribution, railways, postal services, urban water and sewerage services, irrigation infrastructure, and port access. The Australian Competition & Consumer Commission (ACCC) has stated that it intends to use a version of the building block model to determine indicative access prices for fixed-line telecommunications services. The building block model is so-called because the allowed revenue of the regulated firm is equal to the sum of underlying components or building blocks consisting of the return on capital, the return of capital, the operating expenditure, and various other components such as taxes and incentive mechanisms.
Utility ratemaking is the formal regulatory process in the United States by which public utilities set the prices they will charge consumers. Ratemaking, typically carried out through "rate cases" before a public utilities commission, serves as one of the primary instruments of government regulation of public utilities.
Performance-based regulation (PBR) is an approach to utility regulation designed to strengthen utility performance incentives. Thus defined, the term PBR is synonymous with incentive regulation. The two most common forms of PBR are award-penalty mechanisms (“APMs”) and multiyear rate plans (“MRPs”). Both involve mathematical formulas that can lower regulatory cost at the same time that they encourage better performance. This constitutes a remarkable potential advance in the “technology” of regulation. Economic theorists whose work has supported the development of PBR include Nobel prize-winning economist Jean Tirole.
A consumer green energy program is a program that enables households to buy energy from renewable sources. By allowing consumers to purchase renewable energy, it simultaneously diverts the utilization of fossil fuels and promotes the use of renewable energy sources such as solar and wind.
Energy efficiency, or efficient energy use, describes an optimization of the power requirements and environmental impacts of energy systems. This includes actions taken by a governing body to decrease power use over an entire power grid, or actions taken by individuals to make their energy use in their house less wasteful. It is also one of the easiest and most cost effective ways to fight climate change and air pollution.
Volumetric pricing is a pricing strategy frequently used by the public utilities where the fixed costs of the service are recovered proportionally to the amount of use. For example, under this approach a per-kWh pricing of an electric utility includes a small share of the monthly fixed cost of the utility, fixed charges for the service are either absent of inconsequential.
Integrated resource planning is a form of least-cost planning used by the public utilities. The goal is to meet the expected long-term growth of demand with minimal cost, using a wide selection of means, from supply-side to demand-side. For example, for an electric utility the US law defines IRP as a planning process that evaluates the full range of alternatives, including new generating capacity, power purchases, energy conservation and efficiency, cogeneration and district heating and cooling applications. The methodology requires the utility to be able to influence all aspects of the supply chain from production to consumption, so in the US it is used by many vertically integrated (non-deregulated) ones. IRP effectively ends with deregulation. The deregulated utilities still can engage in the IRP, and some interest returned in late 2010s.
