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Utility Dive: Illinois Utilities Push Cloud Computing Rules to Remove Tech Investment Disincentive

Posted by Robert Walton on May 13, 2019

Utility Dive reported on the latest action — seven utilities (and AEE) urging a legislative committee to approve new Illinois Cloud Computing rules currently under review. They included a link to the letter to review committee leaders and AEE's filed comments about the rule. See excerpts below and the entire UD story here:

Seven Illinois utilities and Advanced Energy Economy (AEE) on Thursday asked state regulators to finalize accounting rules for cloud-based computing solutions. Current rules disincentivize some investments and have not kept pace with changes to technology, the utilities say. Those rules allow utilities to earn a rate of return on computing systems developed on-premises, but treat cloud-based systems as operating expenses. The Illinois Commerce Commission launched a rulemaking in December 2017 to consider the changes, citing a need to "level the playing field" between on-premise and cloud-based computing systems at a time when utilities focused on modernization are investing billions in new systems...

Changes to accounting rules would make public utilities "indifferent" to implementing cloud-based solutions versus building more mainframe solutions, AEE told regulators in the May 9 comments.

The group added that whether a computing solution is cloud-based or on-premises, nothing changes basic ratemaking principles: It still must be a "prudent investment and its cost reasonable in amount to be recovered in rates."

"Cloud-based computing solutions provide benefits to customers and can serve the same functions as on-premises computing solutions," AEE said. The proposed change "makes the accounting rules technology-agnostic and removes the disincentive to invest in cloud-based systems as opposed to on-premises systems..."

See the entire Utility Dive story here.

Topics: AEE In The News