Sec. 6. Studies on effects of certain rate treatments and alternative frameworks
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Not later than three years after the date of enactment of this Act, and every five years thereafter, the Secretary, in consultation with the Commission, shall— conduct a study on— inefficiencies in the electric power sector incentivized by existing rate treatments for the transmission of electric energy and any economic, environmental, or societal effect of such inefficiencies, including with respect to the customers of electric utilities, the reliable operation of the bulk-power system, and the deployment of cost-effective grid-enhancing technologies; and alternative frameworks for incentive-based, including performance-based, rate treatments for such transmission, such as the alternative frameworks described in subsection (b); and publish on a publicly available website of the Department of Energy, and submit to the appropriate congressional committees, a report that includes— a detailed description of the findings of such study; and recommendations of the Secretary to align rate treatments for the transmission of electric energy with the goals of lowering costs for the customers of electric utilities, enhancing the reliable operation of the bulk-power system, reducing transmission congestion and other inefficiencies in the transmission or delivery of electric energy, and encouraging the deployment of cost-effective grid-enhancing technologies.
The alternative frameworks described in this subsection are the following: Shared savings frameworks. Revenue decoupling models, under which authorized revenues of utilities are separated from volumetric sales of electricity to reduce disincentives for energy efficiency and programs to reduce the consumption of, or peak demand for, electric energy. Return on equity adjustments, under which authorized utility returns are increased or decreased based on measurable factors such as risk profile, performance outcomes, or efficiency improvements.
Multi-year rate plans, under which revenue requirements and performance expectations for utilities are established for a fixed multi-year period rather than through single-year rate cases. Earnings sharing mechanisms, under which earnings of utilities falling outside an authorized range as compared to the return on equity are shared between shareholders and ratepayers. Total expenditure models, under which capital and operating expenditures of utilities are treated on an equivalent basis to reduce bias toward capital investment.
Performance scorecards, under which utilities are evaluated against transparent outcome-based metrics such as reliability, affordability, equity, or the reduction of emissions, with results informing regulatory decisions or incentive adjustments. The Secretary shall ensure that each study under subsection
(a)is informed by— reports filed with the Commission pursuant to sections 3 and 5 of this Act and section 304 of the Federal Power Act ( 16 U.S.C. 825c ); relevant reports issued by the National Laboratories; and such other studies, reports, and other data sources as the Secretary may determine appropriate.
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Sec. 6
Studies on effects of certain rate treatments and alternative frameworks
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