Challenges in Designing Default Retail Electric Service
A key question in any state’s electricity restructuring plan is whether some form of retail power service should continue to be offered on a regulated basis under certain circumstances to some customers. This question is both a short-term (transitional) and a long-term (post-transitional) issue. So far, in every state adopting retail competition, utility distribution companies (UDCs) have been required to offer retail service on a regulated basis at least during a transition period. Generally, these arrangements have been part and parcel of complex comprehensive political settlements involving many issues including UDC recovery of stranded costs. But the post-transition responsibilities of UDCs to provide regulated retail service have usually been deferred as issues “to be determined” in later regulatory proceedings.
KeywordsProfit Margin Wholesale Price Retail Prex Wholesale Prex Windfall Profit
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