In this issue of "Terzic on Strategy," Branko Terzic, U.S. and Global regulatory policy leader, Energy & Resources, Deloitte Services LP, discusses how anticipated technological improvements have one common characteristic: Obsolete plants and equipment have to be removed  and replaced with new technologies. He says that regulated depreciation rates frequently rely too much on studies of the experienced physical life of assets rather than on the more appropriate projections of useful life. This is especially true when technological change is the driving factor.

He suggests that depreciation rates need to be based on the expected future service life of utility assets if service is going to be matched to the consumers’ usage.

For the full column, download the PDF below. This article is republished with permission from New Power Executive.