WELCOME
Welcome to the website of the Pacific Economics Group companies. The PEG consortium consists of two companies that are active in the fields of litigation and utility regulation. Principals of these companies are based in California and Wisconsin and include several nationally recognized economists. Please explore the site and learn more about the PEG companies and the services we provide.
PEG NEWS
July 1, 2009
The Hawaii Public Utilities Commission today completed three days of hearing on the innovative decoupling proposals of the three Hawaiian Electric Utilities. The proposals feature decoupling for all service classes and a revenue decoupling mechanism of traditional "hybrid" California design. The HECO proposals continue the electric power industry trend away from the revenue per customer approach to decoupling revenue adjustment that is common in the natural gas industry. PEG Research President Mark Lowry was a witness for the HECO companies in the proceedings.
June 22, 2009
The Oklahoma Corporation Commission staff filed responsive testimony today in Oklahoma Gas & Electric's (OG&E) rate case. As part of its testimony, it reviewed the February 2009 PEG Research report, filed as evidence by OG&E in the rate case. The report stated that OG&E was a top performer at minimizing non-fuel O&M expenses, which are the company's chief controllable cost. Staff's testimony concluded that "Staff is in agreement [with the PEG Research study] that OG&E is a very cost-conscious company in its O&M expenses as compared to other utilities".
Spring 2009 
Public Utilities Reports has published Charlie Cicchetti's latest book, Going Green and Getting Regulation Right: A Primer for Energy Efficiency, which responds to the rising interest in energy efficiency and demand-side management programs by exploring the important lessons that can be learned from earlier mandated conservation efforts. Going Green and Getting Regulation Right is a valuable resource for regulators, legislators, utilities, public advocates, and other policy makers. The book draws on a vast database of results from utility programs throughout the nation over the past 15 years. Energy efficiency programs are addressed both quantitiatively and comprehensively. These analyses are complemented by a thorough qualitiative and institutional review of the different approaches to conservation and efficiency that have been taken across the nation and over time. For more information or to order, visit http://www.pur.com/books/55.cfm
March 4, 2009
The Essential Services Commission of Victoria (ESC) today filed comments in an examination of the merits of adding a total-factor productivity (TFP)-based regulatory option in Australia's energy regulatory framework. This examination is being undertaken by the Australian Energy Market Commission (AEMC). The ESC advised the AEMC that a TFP-based option was feasible and appropriate and provided details on a specific, TFP-based regulatory approach. The ESC was advised by Larry Kaufmann when preparing its submsission.
February 26, 2009
Mark Newton Lowry filed testimony today in support of the rate filing of Oklahoma Gas & Electric Co. He reported results of a statistical benchmarking study of the company's base rate operation and maintenance expenses. These expenses are a critical concern in any rate case because they are the principal costs that a utility can control in the shorter run. Using publically available data, Dr. Lowry developed an econometric model of O&M expenses and used it generate benchmarks for the company from 2006 to 2008. The econometric results were also used to guide the development of unit cost indexes and an associated peer group. The research found OG&E to be one of the nation's top O&M cost performers.
January 30, 2009
The Hawaiian Electric companies (Hawaiian Electric, Maui Electric, and Hawaiian Electric Light) today filed a revenue decoupling proposal in Docket No. 2008-0274. The companies have reached an agreement with the State of Hawaii Division of Consumer Advocacy to redouble their efforts to promote energy conservation and renewable energy resources. Revenue decoupling plans for all three utilities are a key part of the agreement. The plans would compensate the utilities for declining sales per customer such as may result from aggressive programs to promote demand-side management and distributed generation.
The companies favor a traditional "true-up" approach to decoupling rather than Straight Fixed Variable ("SFV") pricing. The proposed revenue adjustment mechanism would escalate the revenue requirement as needed for input price inflation, output growth, and new investments. It has a "hybrid" design like that which has often been used over the years by several California utilities. Mark Newton Lowry advised the HECO companies on plan development and prepared a white paper on revenue decoupling for the filing. The paper discusses decoupling experience and plan design issues and presents results of historical simulations for the HECO companies using alternative revenue adjustment mechanisms.
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