Regulatory and tax treatment of electric resources

Integrated resource Planning (IRP) focuses on providing customer energy-service needs at the lowest cost. This paper addresses the flip side of IRP, how shareholders -are when utilities build power plants with different capital and operating costs, buy power from others, or run demand-side -management (DSM) programs. in general, shareholder earnings are related to the capital cost of the project. However, the risk of a disallowance, delay in the rate case, or retail-price competition all change that conclusion. DSM programs, in spite of their capital-intensive nature, are especially harmful to shareholders for utilities that do not have a lost-revenue adjustment mechanism or that face price competition from other suppliers.