PBR Rate-Setting Needs Review to Cope with Technologies
LONDON - It is not only the concerns on sharp rise in electricity rates that would compel energy regulators to continually review rate-setting methodology anchored on performance-based regulation (PBR), but all the more with the increasing incursion of renewable energy (RE) in the mix and the advent of technological and service innovations such as smart grids and intelligent metering system.This was the analysis of the widely-regarded innovator of the PBR scheme and economic adviser to UK regulator Ofgem Professor Stephen Littlechild in an interview with Business Bulletin.Littlechild admitted that when this alternative rate-setting was crafted, the emergence of new technologies in the energy sector as well as regulatory issues on carbon reduction strategies have not been factored in yet."It (PBR) was not developed with these issues in mind," Littlechild said, noting that these emerge as new round of challenges likely to test the purported strong points that PBR may have been offering in the regulatory domain.He projected that the world will see an ever-changing landscape in the energy sector in terms of the integration of renewables in the mix, the incursion of carbon reduction policies, the re-emergence of nuclear power as an option, the ascent of distributed energy, intelligent meters and smart grids as well as the increasing interplay of the energy industry with financial markets.The Philippines is among the countries that embraced PBR as a form of alternative rate regulation, in the objective of attaining greater operational efficiencies and network improvements for the country's regulated utilities. It is similarly hoped that in time, these efficiency gains will redound to lower rates for consumers.PBR is considerably most-tested …
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Publication information: Article title: PBR Rate-Setting Needs Review to Cope with Technologies. Contributors: Not available. Newspaper title: Manila Bulletin. Publication date: May 29, 2010. Page number: Not available. © 2009 Manila Bulletin Publishing Corp. COPYRIGHT 2010 Gale Group.
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