The new rate structure includes several tools that provide the companies the opportunity to recover the fixed costs of operating their natural gas delivery system while also better aligning the energy efficiency interests of the companies with those of consumers, regulators and elected officials, according to Integrys Energy Group.
The Volume Balancing Adjustment (VBA) mechanism, also known as decoupling, has been approved on a four-year trial basis. It reportedly breaks the link between utility revenues and customers’ energy consumption, providing the revenues necessary to run the company’s 6,000-mile natural gas delivery system in Illinois.
According to Integrys, the mechanism will allow the companies to adjust rates to recover or return under or over collections of margin revenues due to variations from the margin revenues that are approved in the rate case.
Integrys noted that decoupling does not shelter its utilities from the impact of increased costs or guarantee the company’s profits. Overall, customers pay no more or no less than what the utility is authorized to recover by state regulators, the company said.
