Sustainable Rate Design for a Modern Grid (New Hampshire Public Utilities Commission)
From 2001 to 2013, new solar photovoltaic (PV) installations grew 30 percent each year, while the average system price steadily declined. This growth in distributed generation, coupled with improved technology, storage, and environmental imperatives, poses a challenge for regulators tasked with designing fair electricity rates. At an energy efficiency workshop for the New Hampshire Public Utilities Commission, Rich Sedano defined the three core principles of equitable rate design. Smart rate design allows customers to connect to the grid for no more than the actual cost of connecting to the grid, establishes charges for power supply and grid services based on the quantity used and the time when they are used, and provides fair compensation for customers supplying power to the grid. Progressive rate design, such as time-of-use rates, critical peak pricing, and the value of solar tariff, can make the difference in cost-effectively meeting public policy objectives while ensuring adequate revenue for utilities.