Rate reform advocates target the adjustment clause

Activists for reform of public utility rates are focussing on the automatic adjustment clause. The Public Utilities Commission of Colorado is seeking comments on reform either to abolish, reconstruct or retain electric cost adjustment clauses for utilities. Incentive mechanisms are another alternative to the clause, and Michigan and California have adopted those. However, the clause may be used for recovery of new costs such as environmental compliance, as was done in Florida.
The propriety of the automatic pass-through of certain types of costs without a formal rate hearing, while always an issue for debate among theorists, has taken a more practical tone [...]