Smart Rate Design for a Smart Future
As the electric utility industry faces a number of fundamental changes, traditional rate design may no longer serve consumers or society best. Customer-sited generation and advanced metering infrastructure both demand and allow a more sophisticated method of designing the electric rates charged to customers. By taking a more progressive approach, regulators can help jurisdictions meet environmental goals and minimize adverse social impacts, while allowing utilities to recover their authorized revenue requirements. In a presentation to the Energy Resources and Environment Committee at the summer meetings of the National Association of Regulatory Utility Commissioners (NARUC), Carl Linvill outlines the technological developments that enable changes in how electricity is delivered and used, and sets out principles for modern rate design in this environment. He shares best practices based on these principles, which include time-of-use rates, critical peak pricing, and the value of solar tariff.