Pricing

Cooperation has produced concrete guidance on time of use rates, described in a new joint paper.

In December 2016, Arizona's utility regulators set in motion a new policy many believe is likely to undermine investment in solar and other distributed technologies in the state. We urge advocates and regulators looking for sustainable models of state DER policy to think carefully before following Arizona's example.

I do not understand why we are still distracted by Net Energy Metering (NEM). It worked well when we had not-so-smart meters and were trying to encourage rooftop solar penetration. People in general and students of regulation in particular are left confused and can easily find some support for both sides. This results in conflicts and proposed compromises that keep the debate going at full tilt. Two things are missing or mostly overlooked in all this regulatory discourse.

Charles Cicchetti's December 2016 article asserts TOU rates are a preferable alternative to demand charges for distributed energy resources (DER) customers. But TOU rates are not enough to maximize the benefits of DER.

Offer end uses as the product, and not therms or watts. The utility becomes a true energy service company.

In the U.S., electric utilities are the major supporter of MRPs. In other countries, the government has been a major proponent. Countries such as Australia, Canada and Great Britain have relied heavily on MRPs, often citing the deficiencies of traditional rate-of-return ratemaking.

Fairness has conflicting meanings for customers, utilities, power generators, DER providers, and others. Regulators and policymakers must understand their goal should not be the perfect rate design; it doesn't exist.

With the mass rollout of smart meters, the idea of default TOU rates is gaining traction. This article presents the load shifting and conservation impacts of TOU rates on residential electricity use in Ontario from their inception in 2009 through to the end of 2014.

The typical solar customer in Southern California could recover their investment in seven years. After which, the facility would provide essentially free electricity for at least 18 more years. If this sounds too good to be true, it is. Those generous returns are paid for by federal taxpayers and California residential customers that lack rooftop solar.