What does AGRA mean in UNCLASSIFIED

Automatic Generation Rate Adjustment (AGRA) is a mechanism that allows electric utilities to adjust their generation rates automatically in response to changes in fuel prices, purchased power costs, or other factors that affect the cost of generating electricity.

AGRA typically works through a formula or algorithm that is established in advance and approved by the relevant regulatory authority. The formula considers various factors that impact the cost of generation, such as fuel prices, purchased power costs, and transmission costs. When these factors change, the formula automatically calculates a corresponding adjustment to the generation rate.

AGRA provides several benefits, including:

• Reduced regulatory burden by eliminating the need for frequent rate case filings due to fuel price fluctuations.
• Improved efficiency in adjusting rates, as AGRA allows for automatic adjustments based on pre-defined formulas.
• Increased transparency and predictability for customers, as they can anticipate rate changes based on known factors.

Potential drawbacks of AGRA include:

• Reduced regulatory oversight, as utilities may have less incentive to minimize costs if rate adjustments are automatic.
• Potential for rate volatility if the formula used for AGRA does not accurately reflect the actual changes in generation costs.
• Concerns about fairness, as customers may question whether the rate adjustments are reasonable and justified.

The use of AGRA varies across jurisdictions. Some regulatory authorities may implement AGRA as a standard mechanism for generation rate adjustments, while others may allow utilities to use AGRA on a case-by-case basis or not at all.