EPRI Report addresses retail electric rate structures.

Press Release Summary:



Technology today makes it easier for utilities to provide different types of electricity pricing plans to consumers. EPRI is collaborating with key industry stakeholders to develop system for characterizing and comparing different retail electric pricing plans. EPRI's report provides language and rate structure descriptions needed to bring all stakeholders onto same page, as well as provide educational materials for newer utility personnel.



Original Press Release:



EPRI has Published a Report, "A System for Understanding Retail Electric Rate Structures"



Technology today makes it much easier for utilities to provide different types of electricity pricing plans to consumers, which can play a valuable role in transforming electricity supply to meet challenges such as the integration of wind and other intermittent resources. Moreover, there is growing interest among regulators and customer advocates to move from one-size-fits-all rate making to offering customers choice and control.

There is growing evidence from pilots that some, and maybe many, customers can benefit substantially from buying electricity under pricing plans. Going forward, what will be needed is a transparent system for characterizing conventional rates and new pricing plans: how they work and what goals they are intended achieve. EPRI is collaborating with key industry stakeholders to develop a system for characterizing and comparing different retail electric pricing plans.

The EPRI rate structures report provides the language and rate structure descriptions needed to bring all stakeholders onto the same page, as well as provide educational materials for newer utility personnel. It serves as a starting point for meaningful dialog among all stakeholders, especially electricity consumers, about how to design portfolios of pricing structures that accommodate diverse consumer needs in ways that improve the utilization of available supply resources and help direct the development of new ones.

Key Takeaways from the Report:

Rates are comprised of different levels of five basic features: differentiation by time, differentiation by usage level, physical aspects of service that are metered and billed (kWh, kW, etc.), overlays that alter some basic aspect of service under limited and specific conditions, and provisions for hedging price and quantity risks.

The underlying design dimensions determine how well a rate structure achieves desired performance goals, such as: energy conservation(i.e., reduce consumption), systematic load shifting to improve economic efficiency, episodic load reduction/shifting, and fostering adoption and efficient use of new electric technologies that benefit the economy and society.

No single rate structure can fulfill all these performance goals. Picking the right rate for the circumstances at hand requires building a rate whose features align with the objectives, and invariably tradeoffs between utility and customer interests. In addition, utilities need a portfolio of alternative rate options to fulfill diverse consumer wants and needs.

The EPRI category scheme will assist utilities in selecting an effective and portfolio of customer-friendly pricing plan.

If you would like a copy of the report, please let me know via e-mail. If you would like to talk with an EPRI expert, please let me know and we'll set something up.

Don Kintner

EPRI

dkintner@epri.com

704-595-2506

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