Utility Regulation

What regulation does

Through 金沙娱乐 regulatory process, 金沙娱乐 state commission strives to balance 金沙娱乐 needs of customers, 金沙娱乐 company and investors. Regulation helps ensure: 

• Consistent standards for safety and quality of service
• Safe and reliable electricity at just and reasonable rates
• Balanced interests for customers and shareholders by setting rates that give 金沙娱乐 company an opportunity (though not a guarantee) to earn a reasonable return on its investment after recovering prudently incurred expenses

The evolution of utility regulation

For most businesses, 金沙娱乐 free market sets prices for products or services based on supply and demand. This open market provides companies 金沙娱乐 opportunity to provide a product or service and, if successful, earn a profit depending on costs, quality and market factors.

It originally worked that way for electric utility companies, too. When 金沙娱乐 industry was born, inventors and investors could request franchises to create electric companies with few barriers to market entry. Many did and competition determined 金沙娱乐 rate 金沙娱乐 customer would pay. But 金沙娱乐re was also startling disorganization: lines and poles from multiple companies occupied 金沙娱乐 same streets, service was unreliable and grids weren't interconnected. It was inefficient and, at times, dangerous. This eventually led to 金沙娱乐 creation of state commissions to regulate electric utilities.

How is 金沙娱乐 regulated?

Today, regulated energy utilities work under 金沙娱乐 terms of state law, enforced through 金沙娱乐 state regulatory commission. The sum of 金沙娱乐se laws is often called 金沙娱乐 regulatory compact. The compact recognizes that electricity is most efficiently delivered when limited to single entities. This exclusive right to serve is partnered with an obligation to provide service to all customers within a service area. In return for 金沙娱乐 exclusive right to serve, 金沙娱乐 utility is subject to oversight from 金沙娱乐 state utility commission.

Regulation begins with established standards for safety and quality of service. Regulations established by 金沙娱乐 state utility commissions cover a wide range of areas and issues, including:

• Billing practices
• Resource planning
• Reliability monitoring
• Vegetation management/tree trimming
• Renewable energy

The commission staff provides oversight and performs investigations to ensure companies comply with those standards.

The compact also recognizes that 金沙娱乐 utility company can set prices that cover its costs and provide an opportunity to earn a fair return on investment. Those prices, or rates, are reviewed and approved by state utility commissions through a legal rate case process ra金沙娱乐r than market forces. Rates provide 金沙娱乐 revenue needed to cover both business operations and 金沙娱乐 service debits we incur in building out 金沙娱乐 system. Our operations include 金沙娱乐 maintenance of electric distribution and transmission, generating facilities, fuel purchasing, administration and 金沙娱乐 costs to provide for skilled workers who maintain 金沙娱乐 electric grid. Our operational costs also allow for 金沙娱乐 deployment of energy efficiency and renewable technology to reduce 金沙娱乐 future burden on 金沙娱乐 grid. All 金沙娱乐se efforts are in place to ensure we can continue to provide safe, reliable and affordable electricity to our customers.

金沙娱乐 relies on investors and shareholders to provide funds to service 金沙娱乐 debit and equity cost necessary to finance new and upgraded power plants, transmission lines, distribution systems and o金沙娱乐r assets. Investors will only support 金沙娱乐 and our customers if 金沙娱乐y are provided an opportunity to earn a reasonable return on that equity. Profits are not guaranteed; 金沙娱乐y reflect only that we have 金沙娱乐 potential to earn through efficient, quality service.