The pace of state-level regulatory activity remains vigorous nationwide, with 96 electric and gas rate cases pending in 37 jurisdictions including the District of Columbia as of June 8.
|Major utility cases in progress in the U.S. — the rate cases — quarterly update|
An additional 25 electric and gas rate cases are expected to be filed in 2020. However, with the great degree of uncertainty and economic havoc wrought by the COVID-19 outbreak, the timing of many rate case filings this year has been delayed or in some instances postponed. As the utility industry has entered this uncharted territory, modifications to pending rate case procedural schedules have occurred, as well as voluntary delays in implementing approved rate changes in order to ease the economic hardship during these unprecedented times.
Stay-at-home and business restrictions called for by leaders to stem the spread of the virus have created several challenges for U.S. utilities, including reductions in usage from the temporary shuttering of businesses, schools and government buildings, lower revenues stemming from higher levels of bad-debt, and higher operating costs associated with enhanced employee and customer personal safety measures and sequestration of essential employees in order to maintain sufficient staffing to ensure safe and reliable utility service.
With leaders now beginning to lift lockdown restrictions called for to slow the spread of the pandemic, many of the moratoriums put in place on utility service disconnections are nearing an end.
In the pending 96 electric and gas cases, the utilities are seeking rate changes aggregating to about a $7.8 billion net rate increase, excluding the later-year steps of multiyear rate requests.
The returns on equity requested in the 96 pending electric and gas rate cases range from 8.20% to 11.00%, averaging 10.16% in the vertically integrated electric rate cases, 9.79% in the electric distribution rate cases, 9.60% in the electric limited-issue rate proceedings where an ROE is specified and 10.21% for gas local distribution general rate cases. The gas limited-issue rider cases are premised upon previously approved ROEs, and so no new return determinations are sought.
Over the last several weeks, Regulatory Research Associates, a group within S&P Global Market Intelligence, surveyed large electric and gas companies and state public utility commissions concerning pending rate cases.
Regulatory Research Associates is a group within S&P Global Market Intelligence.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.