%0 Report %A Peter Cappers %A Sydney Forrester %A Andrew Satchwell %D 2021 %G eng %T Disaggregating Future Retail Electricity Rate Growth %8 09/2021 %X
Recent Berkeley Lab research found that modest retail rate increases over the past 10 years were mostly driven by large increases in capital expenditures (CapEx) that were offset in part by substantial wholesale price reductions. Decision-makers are increasingly concerned about the potential future rate impacts of a number of policies and industry trends that support rapid decarbonization, electrification, and grid modernization. Using historical FERC Form 1 data and the existing literature on policies and industry trends that are likely to affect utility-incurred costs and retail sales, Berkeley Lab researchers developed ranges of forecasted growth rates for cost-related rate drivers (i.e., fuel and purchased power; transmission, distribution, generation, and other categories of both non-fuel operations & maintenance and CapEx) and non-cost related rate drivers (i.e., retail sales, peak demand, and customers). These were then used as inputs to a pro-forma utility financial model (FINDER) that estimated the growth in retail electric rates between 2020 and 2030 for a prototypical vertically-integrated investor-owned utility in the United States. The analysis produced the following results: