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RAP’s Electric Cost Allocation for a New Era manual lays out an approach appropriate for the 21st century power grid, characterized by growing adoption of variable renewable energy, storage and demand-side technology. In a follow-up discussion to our earlier webinar on this topic, co-authors Jim Lazar and Paul Chernick and manual editor Mark LeBel took a more detailed, technical look at how to update cost allocation methods to ensure that costs are shared efficiently and fairly. Now that many utilities have full customer data from advanced metering infrastructure (AMI), costs can be assigned based on time, an increasingly important distinction in a system where resource flexibility has become paramount. The webinar broke down specific issues to be considered within the generation, transmission and distribution systems, considered questions about AMI and customer classification, and examined the less commonly used marginal cost study methods.

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