The 'But For' Test — A Fiction That Needs To Go

Law360 (June 25, 2010, 11:58 AM EDT) -- There is widespread agreement among state and federal regulators and policymakers that the most significant impediment to developing the electric transmission infrastructure needed to ensure reliable and efficient delivery and facilitate renewable generation goals is the controversy over who will pay for the new infrastructure.

While there is general agreement that the cost recovery rules should be based on "beneficiary pays," there is a continuing controversy over what exactly this means.

Historically, utilities developed rates for transmission service based on the assumption that the local transmission system was planned and operated to meet the aggregate needs of their local customers. Rates...

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