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

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

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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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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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RESIDENTIAL FIXED CHARGES

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

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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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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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TIME OF USE RATES

 Pass‐Through Price Signal from Wholesale Power Purchases

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Source: SMUD

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OTHER RATE DESIGN IDEAS

 Low or Fixed Income Customers  Prepay Model

  • Up to 10% savings

 Unbundling  Decoupling

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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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