What am I missing here?

I am not sure I understand what “decoupling” is (recent articles here and here), but it scares the bejesus out of me. If my understanding is correct, and I hope I am way off base, decoupling is a way for utility companies to charge customers more if those customers curb their energy use to the point at which revenues drop for the utility company.

Under the concept known as "decoupling," energy companies can change distribution rates to make up for lost money to cover fixed costs, if customers conserve more and demand for electricity drops. It's designed to address concerns by utility companies that successful conservation methods will cause their revenues from distribution charges to drop, putting them at risk of not covering their fixed distribution costs.

The Maryland Public Service Commission approved decoupling with the idea that it would lift a barrier to large-scale energy conservation initiatives.

It would lift a barrier to large-scale energy conservation initiatives? What it would do is eliminate any market based incentives to conserve energy. Someone please tell me this is a bad dream or I am missing a big piece of the picture.

HT: O’Malley Watch