Lawrence Berkeley National Laboratory

Electric utilities have historically relied on volumetric energy rates. Reductions in sales can have an adverse effect on a utility's ability to sufficiently recover its costs. Decoupling mechanisms, when properly designed, diminish the link between revenues and sales. Analysis of annual rate adjustments from decoupling mechanisms indicate the majority of those adjustments are small. However, once a surcharge is applied there is an 86 percent chance there will be a surcharge in the next year.