ratemaking
/ˈreɪtˌmeɪkɪŋ/
Definition
The formal regulatory process through which a public utility commission determines the prices and cost-recovery structures that utilities are permitted to charge consumers.
Etymology
This is a compound word formed from 'rate' (from the Old French 'rate,' meaning a fixed price) and 'making' (from the Old English 'macian'). It emerged in the 20th century specifically to describe the systematic administrative and legal procedures used in public utility regulation.
In the news
In the article, ratemaking is described as a utility-driven process that PUCs are traditionally reactive to, though modern needs demand they take a more proactive role. The author highlights how utilities currently hold the advantage in these proceedings due to their superior staffing and data resources.
Rethinking State Regulators in Climate and Affordability Agendas
Read the full article ↗Federation of American Scientists