The SPEER Commission on Texas Energy Efficiency Policy was established in 2014, to create a shared vision for the future of efficiency in the Lone Star State. Through consensus, they developed detailed recommendations to move efficiency forward and strengthen the state’s economy which are included in the 2015 SPEER Commission Final Report. The Commission includes former regulators and legislators, and representatives of electric companies, non-profits, manufacturers, academic institutions, and more.
Building on the previous recommendations, SPEER reconvened this group to consider the possible need for and impact of modifications to either the revenue recovery or rate design elements of utility rate regulation, specifically addressing the unbundled ERCOT investor-owned utilities. Will Wynn, former mayor of Austin, and Margaret Keliher, former county Judge of Dallas County, will again co-chair the forum in its second round of meetings. SPEER has released a white paper, Win-Win Utility Regulation, which was provided to SPEER Commission members as a thought piece to stimulate debate at its December 2016 Meeting. The SPEER Commission heard a presentation by invited Laurence Kirsch, of Christensen Associates, the primary author of a report commissioned by the Public Utilities Commission of Texas: Alternative Ratemaking Mechanisms. John Shenot, of the Regulatory Assistance Project participated in the second meeting, to provide technical insights and trends in other states having similar discussions.
How investor-owned electric utilities are allowed to recover their investments, and expenses, or make a profit, is purely dependent upon a constructed policy framework. Under the current framework, or regulatory process, utilities are allowed to earn a profit through a rate of return on their investments, driving them to focus on building capital assets. With the explosion of the “Internet of Things”, including smart thermostats, and the adoption of on-site generation by consumers, utilities are considering alternatives to current rate mechanisms.
The 2017 SPEER Commission Report includes their consensus statement to encourage the industry to continue to look for ways to improve the market and accelerate investment in energy efficiency.