Decoupling Utility Revenues from Throughput
Electric rate structures can have significant impact on the economics of CHP projects. The most common current U.S. rate structure links utility revenues and returns to the number of kilowatt-hours sold, and this leads to an unintended disincentive for utilities to encourage customer-owned CHP and other forms of onsite generation. "Decoupling" (or separating) a utility’s revenue from the amount of energy it sells changes this disincentive. Decoupling can be combined with a sliding scale or range of earnings potential that rewards increasing efficiency. Decoupling is a policy not specific to CHP, but one that would nevertheless help encourage it.