Rate freezes, arrangements where utilities are prohibited from filing rate cases, have been commonly used nationwide since the 1990s. As of January 2018, rate freezes or rate case moratoriums are in place across 27 jurisdictions, impacting 37 electric and 31 gas utilities. While these arrangements have overwhelmingly originated from past rate cases and are intended to benefit consumers, some adverse consequences can also result from such arrangements.
SNL Financial recently completed a comprehensive study of all outstanding electric and gas utility rate freezes. Highlights from several of these cases are included in the table below.
Selected Rate Freezes and Related Actions
|Jurisdiction||Company||Rate Freeze Expires||Comments|
|Arizona||Arizona Public Service||6/1/19||· The company may not file its next rate case until June 1, 2019
· Based on past rate cases, the earliest new rates could be implemented would be August 2020
|California||Pacific Gas & Electric||1/1/20||· The PUC authorized electric and gas rate changes for a 2017 test year and attrition rate increases for 2018 and 2019
· Except for these rate changes, rates are not expected to change prior to January 1, 2020
|California||San Diego Gas & Electric||1/1/19||· The commission authorized electric and gas rate changes for the 2016 test year and attrition rate increases for 2017 and 2018
· The company is to refrain from filing a general rate case that would take effect prior to January 1, 2019
|California||Southern California Gas||1/1/19||· The commission authorized a rate change for the 2016 test year and attrition rate increases for 2017 and 2018
· The company is to refrain from filing rates that would take effect prior to January 1, 2019
|Florida||Duke Energy Florida||1/1/22||· The company’s electric rates are frozen through 2021
· Company is permitted to increase rates by pre-determined amounts in 2019, 2020, and 2021
|Florida||Florida Power & Light||1/2/21||· Four-year rate plan in place, allowing rate increases on January 1, 2017 and January 1, 2018
· An additional increase is expected when the Okeechobee Clean Energy Center becomes operational; expected on June 1, 2019
· Rates are not to increase in 2020
|Georgia||Georgia Power||1/1/20||· The company’s electric base rates will remain at current levels through 2019
· Company is required to file its next rate case on July 1, 2019
|Minnesota||Northern States Power Co.||1/1/20||· In 2017, the PUC adopted a settlement which authorized a four-year plan with a three-step electric rate increase
· The company is not permitted to increase base rates until January 1, 2020, outside of the settlement
|New York||Consolidated Edison Co. of New York||1/1/20||· Company operating under a three-year, PSC-approved plan which allows for annual rate changes to both electric and gas rates
· Base rates are to be frozen otherwise
Utility rate freezes and similar incentive rate initiatives have both inherent benefits and corresponding costs to be considered:
SNL’s RRA Special Topical Report: Rate Freezes: Their Historical Context and Prevalence Today (Membership is required to access this article)
This report is part of ScottMadden’s Regulatory Minute series. To view all featured Regulatory Minutes, please click here.
Additional Contributing Author: Benjamin Lozier
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