Decoupling can affect ratepayers in a variety of ways. Ratepayers should ultimately benefit from the efficiency opportunities and incentives the policy is intended to encourage. Individual consumers would benefit from reducing their energy usage as rate adjustments are spread among all ratepayers. And consumers collectively would benefit from lower energy use since savings in fuel and other variable costs (for natural gas, the large majority of costs) would be passed on to them. As consumers broadly engage in energy efficiency, energy costs may also decrease for all ratepayers as high costs are avoided for new plants and pipelines. Decoupling may also reduce volatility in energy bills due to weather and other factors (and certainly reduces risk for utilities). It preserves customers’ incentives for efficiency while removing utilities’ disincentives.
Full article: http://ase.org/resources/utility-rate-decoupling