CHARGING UP YOUR RATE DESIGN PRESENTED BY GARY SALEBA, ANNE FALCON, - - PowerPoint PPT Presentation

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CHARGING UP YOUR RATE DESIGN PRESENTED BY GARY SALEBA, ANNE FALCON, - - PowerPoint PPT Presentation

Oct 16, 2022 950 likes •1.15k views

NORTHWEST PUBLIC POWER ASSOCIATION ANNUAL MEETING TULALIP, WASHINGTON MAY 17, 2016 CHARGING UP YOUR RATE DESIGN PRESENTED BY GARY SALEBA, ANNE FALCON, & STEVE ANDERSEN EES CONSULTING, INC. A registered professional engineering and management

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NORTHWEST PUBLIC POWER ASSOCIATION ANNUAL MEETING

TULALIP, WASHINGTON MAY 17, 2016

CHARGING UP YOUR RATE DESIGN

PRESENTED BY GARY SALEBA, ANNE FALCON, & STEVE ANDERSEN EES CONSULTING, INC.

A registered professional engineering and management consulting firm with

  • ffices in Kirkland, WA and Portland, OR
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CURRENT STATE OF AFFAIRS

 Excellent Load Data Collected by Advanced Metering Infrastructure

  • Hourly or more frequent demand data
  • Result = more accurate allocation factors in Cost of Service Analyses (COSAs)

 Better Cost Tracking for COSAs

  • Result = more accurate cost allocation  more accurate retail rates
  • COSA margin of error reduced

 Changes in Energy Consumption Patterns

  • Decreases in residential average usage due to:
  • Energy efficiency
  • Distributed generation/net metering

 Price Signals through Rate Design

  • Incent customers to shift loads to periods when the cost of power is lower

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SLIDE 6

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Smart Meter Worry #1: Smart Meters are a Surveillance Device – a Search Without a Warrant

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SLIDE 7

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Smart Meter Worry #2: Health Concerns

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SLIDE 8

CUSTOMER SEGMENTATION/CUSTOMER CLASSES

Customer Segmentation Principles

  • Load characteristics
  • Physical/service characteristics
  • Other factors

Statistical Methods to Differentiate Load Characteristics

  • Hypothesis analysis to determine difference in average usage
  • Monte Carlo analysis for load factor estimations
  • Examples
  • Marijuana grow facilities
  • Data centers
  • High density user rates
  • Electric vehicle rates
  • LED rates

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SLIDE 9

WHAT IS THE RIGHT PRICE SIGNAL?

 Demand Rates for Residential Customers

  • Coincident peak vs. individual (non‐coincident) peak?
  • Ratchet?

 Large Fixed Charges  Seasonal  Block Rates  Time of Use Rates

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CASE STUDY – RESIDENTIAL DEMAND RATES

 Example: Glasgow Electric Plant Board (KY)

  • Residential: $10/kW‐mo. coincident peak

demand charge

  • Rates effective March 2016

 Educate Consumers

  • What is a kW?
  • Informational bills ($0/kW)
  • How do you avoid high bills?

 Consider Severe Weather  Review Projected Bill Impacts

  • Go slow

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SLIDE 11

RESIDENTIAL FIXED CHARGES

10 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50

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SLIDE 12

FIXED CHARGES UNDER‐COLLECTING AT MOST UTILITIES

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$8 $9 $10 $10 $14 $15 $15 $18 $19 $20 $25 $18 $32 $42 $16 $29 $32 $36 $28 $35 $41 $45 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 Utility C Utility B Utility A Utility E Utility G Utility D Utility F Utility H Utility J Utility I Utility K

Existing Basic Charges vs. COSA Recommended Basic Charges

Existing Basic Charge COSA Recommended Basic Charge

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SLIDE 13

WE’RE ALL IN THIS TOGETHER

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THE CALIFORNIA EFFECT

 Rate Design in California

  • Cost‐based rates
  • Transition from block rates to TOU rates
  • Net metering

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PG&E INTERMEDIATE RATES

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SLIDE 16

TIME OF USE RATES

 Pass‐Through Price Signal from Wholesale Power Purchases

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Source: SMUD

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SLIDE 17

OTHER RATE DESIGN IDEAS

 Low or Fixed Income Customers  Prepay Model

  • Up to 10% savings

 Unbundling  Decoupling

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SLIDE 18

GRANDA SALEBAISMS

 Lead, Follow, or Get Out of the Way  If You Don’t Do It, Someone Else Will  Never Give Away Something You Can

Charge For

 Patience My Friend, Patience

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