Modernizing utility rates to aid energy efficiency plans

Gary Dirks

“You cannot run an economy, especially one poised for growth (like Arizona) without energy,” noted two Arizona State University energy experts in an op-ed that appeared in the Dec. 19 Arizona Republic.

“On the cusp of its 100th birthday, Arizona is facing an aging energy infrastructure that is unprepared for a sustainable future,” wrote ASU’s Gary Dirks and Matthew Croucher. Dirks is director of LightWorks, an ASU initiative that capitalizes on the university’s strengths in solar energy and other light-inspired research. He is also a distinguished sustainability scientist with ASU’s Global Institute of Sustainably. Croucher, an economist, is an associate research professor at the W.P. Carey School of Business and a senior sustainability scientist with ASU’s Global Institute of Sustainability.

Matthew Croucher

The two argue that on one hand, utilities are required to “put in place programs that will produce cumulative annual electricity savings of at least 22 percent by 2020,” while on the other hand, “outdated rate-setting mechanisms provide revenue to utilities based on how much energy is sold.”

While citing the need for long-term transformational energy policies for Arizona, Dirks and Croucher called for incremental steps, including a rate-modernization financing mechanism known as “decoupling,” which will “adjust electricity prices periodically to ensure that a utility receives an authorized amount of revenue independent of its volume of sales.”

Read the entire op-ed at

Article source: Arizona Republic


Editor's Note: Links are included for informational purposes only. Due to varying editorial policies, news publications may remove or change a link for archival purposes at any time without notice.