Major Rate Case Process Overview



Summary: A rate case is the formal process used to determine the amounts to charge customers for electricity, natural gas, private water and steam service provided by regulated utilities. Rate cases are a primary instrument of government regulation of these industries. Interested persons may intervene and become parties in a utility company’s rate case. Typical intervenors include: industrial, commercial and other large-scale users of electricity; public interest groups; representatives of residential, low-income and elderly customers; local municipal officials; and, dedicated advocacy groups. The applicable legal requirements require the Public Service Commission (PSC) to render a decision within 11 months after a major rate case is filed. Rate cases proceed in an entirely public and open process.

Rate-Setting Process: To begin, the utility company submits a filing to demonstrate the need for a rate increase. Included in the rate filing are estimates of expenses, including operating expenses (labor, pension costs, materials, fuel); depreciation costs; taxes; a return on investor-provided capital; and recognition of utility plant additions and capital expenditures.

Rate-Setting Timeline:



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Major Rate Case Process Overview updated: 09/23/2011 03:55:53 PM

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