### Question
How does the law define automatic adjustment clause?


### Answer
Under *16 U.S.C. § 2625*, **automatic adjustment clause** is defined as:

> a provision of a rate schedule which provides for increases or decreases (or both), without prior hearing, in rates reflecting increases or decreases (or both) in costs incurred by an electric utility

#### Citation:
  - *16 U.S.C. § 2625*
  - Heading: **CHAPTER 46-PUBLIC UTILITY REGULATORY POLICIES > SUBCHAPTER II-STANDARDS FOR ELECTRIC UTILITIES**

