Impact of voltage reduction on electric utility cost recovery and retail rates in a state or publicly regulated environment

The purpose of this paper is to present an analysis of the Conservation Voltage Reduction (CVR) financial impacts to utility cost recovery methodology in a state regulated environment. The impacts addressed in this paper include wholesale purchased power costs and retail energy sales. A sensitivity analysis is included to determine the impact of fixed distribution and customer related expenses where a modified cost based customer availability charge is allocated to CVR reduced kWh retail billing units for the residential and small commercial rate classes. The impact analyses are designed to test the hypothesis that greater use of voltage reduction will require higher retail rates to enable rural utilities to meet annual revenue requirements.