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Net lost revenue adjustment (NLRA) mechanisms for utility DSM programs

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  • Baxter, Lester W.

Abstract

We examine the experiences that states and utilities are having the NLRA approach. Contrary to concerns raised by some industry analysts, our results indicate the NLRA is a feasible approach to the lost-revenue disincentive. Seven of the 10 states we studied report no substantial problems with their approach. We observed several conditions linked to effective NLRA implementation and, for those states reporting problems, conditions linked to implementation difficulties. Finally, observed changes in utility-investment behavior occur afer implementation of DSM rate reforms, which include deployment of NLRA mechanisms. We find that utilities in states with lost revenue recovery invest more than twice as much in DSM as do utilities in other states.

Suggested Citation

  • Baxter, Lester W., 1995. "Net lost revenue adjustment (NLRA) mechanisms for utility DSM programs," Energy, Elsevier, vol. 20(12), pages 1215-1223.
    • Handle: RePEc:eee:energy:v:20:y:1995:i:12:p:1215-1223
    DOI: 10.1016/0360-5442(95)00069-S
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    Cited by:

    1. Sousa, José Luís & Martins, António Gomes & Jorge, Humberto, 2013. "Dealing with the paradox of energy efficiency promotion by electric utilities," Energy, Elsevier, vol. 57(C), pages 251-258.
    2. Hirst, Eric & Cavanagh, Ralph & Miller, Peter, 1996. "The future of DSM in a restructured US electricity industry," Energy Policy, Elsevier, vol. 24(4), pages 303-315, April.
    3. Baxter, Lester W., 1995. "Understanding net lost revenue adjustment mechanisms and their effects on utility finances," Utilities Policy, Elsevier, vol. 5(3-4), pages 175-184.

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