Balancing debt and equity in utility rates to benefit ratepayers
The article discusses how regulators decide on the mix of debt and equity a utility company should have to set fair rates. They need to strike a balance between attracting investors with high returns and keeping rates reasonable for customers. Using more equity can improve a company's financial health, but it's more costly than debt. Recent rate orders show regulators making adjustments to capital structures to benefit both investors and customers, like removing non-utility investments and using special calculations for different scenarios.