Climate normals and weather normalization for utility regulationSeoung Joun Won, X. Wang () and Henry E. Warren Energy Economics, 2016, vol. 54, issue C, 405-416 Abstract: In the regulation of natural gas and electric utilities, the determination of rate revenues commonly involves a sales adjustment to reflect the difference between actual weather and normal weather. This adjustment process, commonly known as weather normalization, is required to properly determine a set of rates which yields the revenue requirement under the assumption of normal weather. Normal weather values that characterize long-term weather patterns are critical component of weather normalization. Conventionally, normal weather values are calculated using the Standard Climate Normal (SCN). The SCN for any given calendar day is the 30-year average of the associated weather observations for that calendar day. In the regulatory process the SCN can inadvertently introduce biases in the weather normalization adjustment. This study investigates the sources and mitigation of these biases. Keywords: Climate normals; Weather normalization; Rate cases; Utility regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:54:y:2016:i:c:p:405-416 DOI: 10.1016/j.eneco.2015.12.016 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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