Public Power Utilities identify electricity rates based on cost of service while keeping customer needs and the community’s objectives front and center.
As community-owned utilities, they do not answer to remote shareholders and are not driven by a profit motive. Revenues are invested right back into the utility and community.
Rate-setting typically follows a five step process. Have a look at this graphic produced for the APPA to learn more:
Current financial data on the impact of COVID-19 on community-owned utilities reveals several national trends and the need to factor in case-by-case issues during the analysis. Above all, the data makes clear that the best strategy for a strong recovery is following the fundamentals of utility financial management: develop key financial targets, make a plan to meet those targets, and stay true to the plan.
Electric rate structures have the potential to evolve and benefit utilities and customers. Advancements in technology have made it possible to recognize and charge customers based on their usage patterns, relay accurate price signals, and design rate structures that reflect the fixed and variable costs of providing electric service.