In public utility regulation, decoupling refers to the disassociation of a utility’s profits from its sales of the energy commodity. Instead, a rate of return is aligned with meeting revenue targets, and rates are adjusted up or down to meet the target at the end of the adjustment period.
Pros
Cheap way to create more opportunity for consumers and third-parties.
Cons
Can be hard to implement, as getting utilities to transition can be challenging.
Real Talk
The energy transition requires that utilities serve as facilitators of community energy markets, not owners of it. Check to see if your utility is decoupled, and if it’s not, get to work on decoupling it.