With More Member-Sited Resources, What Does that Mean for Rate Design?
As prices for deploying on-site power generation trend downward, new solar photovoltaic (PV) installations in the United States have grown by 30 percent annually since 2001. Consumers have demonstrated that they value the ability to produce their own power and reduce their carbon footprint. These same customers, in turn, can serve as a resource for the grid. So how does this two-way street affect rate design options? At a meeting of the Northeast Association of Electric Cooperatives (NAEC) Rich Sedano discussed the broad palette of rate design options available to utilities faced with growing deployment of distributed generation, and provided guidance about how to assess them. He outlines six principles for designing rates for distributed generation users—for example, PV users should be able to connect to the grid for only the actual cost of connecting to the grid, and utilities should recognize the full value of solar to the grid when establishing fair rates and compensation for distributed generation users. Describing the ongoing evolution of the power sector, Mr. Sedano encourages utilities to design rates around the clear trends toward greater automation and more choices for consumers.