Energy regulators engage in a complex balancing act of many, at times, competing objectives—crafting a plan to comply with the U.S. Environmental Protection Agency’s Clean Power Plan, strategically deploying grid resources, encouraging energy efficiency, ensuring adequate revenue for utilities, while also ensuring fairness, universal access, and social justice. In markets increasingly influenced by customer-sited resources, traditional rate design works at cross-purposes with these goals. In a webinar sponsored by the National Governors Association, Richard Sedano described rate design options that work in harmony with these changes in the power sector. Three principles make up the foundation of this “smart pricing.” Customers connecting to the grid should only pay for the actual cost of connecting to the grid. They should pay for grid services in proportion to the amount they use and the time of use. Customers supplying power to the grid should be compensated fairly for the value of the power they supply. Smart rate design recognizes that customers can be a valuable resource, especially with technology developments that support best practices, such as time-of-use rates, critical peak pricing, and the value of solar tariff.