Utility Rate Design and the Influence of Emerging Technologies

October 7-8, 2019 | Phoenix,AZ ::

1019-rate-design

Electric and natural gas utilities are undergoing sweeping changes as their industries transform. Advanced metering, distributed generation (including rooftop solar), home battery storage, smart(er) thermostats and more efficient appliances: all influence utility rate design. In some cases such as advanced metering and thermostats, the capabilities accommodate rates that were not previously feasible — for example, demand response tariffs that encourage customers to use less power during system emergencies or hours with high wholesale costs. In other cases, as with distributed generation and battery storage, the new technology may allow customers to exploit the utility’s existing rates to create potential inequities regarding fixed-cost recovery. 

Utilities aren’t the only ones in the power industry to explore new rate designs and pricing options. Their regulators are calling for change. Stakeholders and intervenors are also getting into the act.  Under current regulatory frameworks, rate design reform discussions among all stakeholders must start “today” if utilities hope to meet the needs of their customers in the next decade (“tomorrow”).

To assess the impact of increased renewables and enabling technologies on utility rate structures, EUCI’s 17th Annual Rate Design conference brings together subject matter experts in the utility rate design field — providers, regulators, and industry experts. The blend of relevant presentations and panel discussions will provide current industry trends, state-of-the-art perspectives and best practices in innovative pricing and the valuation of distributed resources operating in a modernized grid.

Learning Outcomes

• Explore rate design options for addressing higher penetrations of distributed generation
• Discuss the impact of energy storage has on rate design
• Hear about emerging rate design issues from the perspective of industry regulators
• Discuss customer perspectives and their willingness to accept different rate design and pricing options
• Explore the rate design challenges of accommodating distributed energy
• Evaluate the impact of electric vehicles and distributed energy resources on residential rate design
• Discuss the potential unintended consequences of certain rate designs
• Explore whether traditional Bonbright ratemaking models still work effectively in today’s utility business environment

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.0 CEUs for this conference and 0.4 CEUs for the workshop.

 

Requirements for Successful Completion of Program

Participants must sign in/out each day and be in attendance for the entirety of the course to be eligible for continuing education credit.

Instructional Methods

Case Studies, Panel Discussions and PowerPoint presentations

Monday, October 7, 2019

8:00 – 8:30 a.m. :: Registration & Continental Breakfast

8:30 – 8:40 a.m. :: Conference Overview and Introduction of Conference Chairs

8:40 – 9:00 a.m. :: Opening Address from Arizona Public Service

Arizona Public Service (APS) was founded in 1886 and is the largest and longest-serving electric company in the state, serving 11 of Arizona’s 15 counties. In these changing times, APS recognizes new technologies and growing customer expectations are leading to rapid changes at the company and in more generally throughout the industry.  The utility’s corporate vision is to create a sustainable energy future for Arizona.  This opening segment will review how innovative rate design supports the accomplishment of that long-term APS mission. 

Barbara Lockwood, Vice President, Arizona Public Service (APS)

9:00 a.m. – 11:45 a.m. :: Session I: The Impact of Energy Storage on Rate Design

10:00 – 10:20 a.m. :: Networking Break

Energy storage continues to make headlines and garner attention from the public, electric utilities, lawmakers, and regulators. Rate design plays a pivotal role in the pace of adoption of Distributed Energy Resources (DER), including energy storage.  Broader industry trends such as the growth of DERs and reevaluation of traditional rate design all typically include energy storage considerations. In this session, industry experts will discuss how rate design can affect the adoption of energy storage and how the impact of energy storage can affect rate design.

TOU Rates to Support Distributed Storage Resources

Utilities are increasingly considering TOU rates to shift load.  However, TOU rates have the potential to encourage distributed storage technologies that arbitrage the price differential between on-peak and off-peak time periods. In this presentation, learn how Decoupling and TOU rates could be used to align the utility’s financial interests with the deployment of distributed storage resources. 

Steve Wishart, Manager, Pricing and Planning, Xcel Energy

Southern California Edison’s New “TOU-D-PRIME” Rate

On March 1, Southern California Edison introduced a new optional rate schedule intended specifically for homeowners with energy storage: the TOU-D-PRIME rate. This TOU-D-PRIME rate has all the elements of an advantageous rate for energy storage system (ESS) economics. In this presentation, learn how your utility can incentivize behind-the-meter residential energy storage and hear about SCE’s larger migration efforts to TOU rates.

Andre Ramirez, Senior Advisor, Regulatory Affairs, Pricing Design & Research, Southern California Edison (SCE)

Eva Molnar, Senior Manager, Customer Programs & Services, Southern California Edison (SCE)

Rate Design Considerations to Aid Energy Storage

The penetration of customer-sited distributed generation (DG) continues to grow in many markets. Reduced costs for energy storage may allow the industry to move beyond net metering, as customers with DG could pair their generation with storage to efficiently respond to time-differentiated and/or demand-based rates. In this presentation, attendees will learn how dispatching energy storage against different retail rate designs can improve battery economics.

John Fernandes, Senior Consultant – Emerging Technologies, Customized Energy Solutions (CES)

11:45 a.m. – 12:45 p.m. :: Group Luncheon

12:45 – 2:00 p.m. Session II: Regulatory Perspectives on Rate Design

This regulatory session will take a comprehensive look at Rate Design. Each speaker will provide a brief regulatory overview on rate design issues in their respective regions, particularly with respect to addressing emerging issues such as distributed generation, electric vehicles and advanced metering. This session will also include a moderated panel discussion on evolving regulatory concerns with energy policy initiatives.

The Net Billing Pilot in Jamaica

In 2012 the electricity regulator in Jamaica approved the implementation of a Net Billing Pilot Program for small scale renewable energy generators. This was undertaken in preference to the more popular net-metering model used elsewhere. In this session the tariff construct and logic as well as the result of the pilot will be discussed.

Cedric Wilson, Deputy Director General, Office of Utilities Regulation (OUR)

Are Demand Charges Due for Reform? – A Vermont Review

Demand charges took hold in Vermont about a century ago and have existed largely unaltered despite significant advances in metering, better communications capabilities, opportunities for load management, and regional wholesale market reforms. After an 8-month conversation with utilities and stakeholders, the Department concluded a report finding that traditional demand charges are indeed due for a makeover. In this session, Riley Allen, Deputy Commissioner, discusses the nature of the changes needed, along with how and why Vermont reached these conclusions.

Riley Allen, Deputy Commissioner, Vermont Department of Public Service

2:00 – 2:15 p.m. :: Afternoon Break

2:15 – 5:15 p.m. :: Session III: Best Practices in Electric Vehicles & DG Rate Design

The generation of electricity by renewable sources like solar and wind continues its swift ascendancy across North America. With these increases in distributed generation (DG), electric vehicles (EVs) ownership and automated energy management – it is important for providers to continue to update their rates. EVs have the potential to provide substantial benefits to society by reducing emissions while lowering both transportation fuel costs and electricity rates. Effective EV rate design is critical for ensuring that these benefits are realized. In this session, attendees will learn about the approaches to dealing with these new challenges.

A Tesla Exchange about EV’s

Always on the bleeding edge, Tesla has agreed to share their thoughts about all things electric vehicles within the utility industry. In this session, the presenter will dive into rate design options for different charging use cases and power levels, look at innovative ways to bring beneficial electrification to C&I fleets, and discuss what the term “managed charging” really means from a customer and operator perspective. No matter what stage of an EV strategy your utility currently finds themselves, you’re sure to take away some great action items from this session. 

Patrick Bean, Senior Manager, Policy and Business Development, Tesla

The Lifestyle Rate Program at Cobb EMC

To increase electric vehicle (EV) adoption in northwest metro Atlanta, Cobb EMC is the first utility in the nation to offer free home charging to accelerate EV adoption. This is the utility’s revolutionary NiteFlex rate, which is part of Cobb EMC’s Lifestyle rate program that includes Niteflex and a demand rate. This presentation will provide results of how customers are responding to this innovate rate. 

Tim Jarrell, Vice President, Power Supply and Planning, Cobb EMC

Electric Vehicles Mythbusting

While Electric Vehicle (EV) sales have grown rapidly in the U.S. and are forecast to increase many consumers are still uninformed about the basic facts of owning and operating an EV. In this session, the speakers will share the benefits that EVs can provide to consumers and the role that electricity providers can play in educating consumers about them. Darren Epps, with Georgia Power, will discuss the utility’s efforts in EV education and David Kolata with the Illinois Citizens Utility Board (CUB), will discuss a new study on the potential effects of EVs on residential electricity rates.

Darren Epps, Product Development Specialist, Southern Company

David Kolata, Executive Director, Citizens Utility Board (CUB)

EV Load Growth Through Increased Smart Charging Infrastructure

This session will provide an outlook on current EV market growth – vehicles, load, and related electrified technologies and discuss alternative rate structures to enable transportation electrification. It will also consider various options for utility programs, including potential utility deployments and capitalized investments including the value of software solutions that allow site hosts to make capital investments smartly using power management and power sharing technologies that can save significant capital dollars in infrastructure upgrades. 

Renee Samson, Director of Utility Solutions, ChargePoint Inc.

Tuesday, October 8, 2019

7:45 – 8:15 a.m. :: Continental Breakfast

8:15 a.m. – 12:00 p.m. :: Session IV: Alternative Ratemaking Approaches

10:00 – 10:15 a.m. :: Morning Break

Today’s utilities face increasing renewables penetration and regulatory burdens that pose significant threats to profit margins. Designing rates that properly value and enable a high penetration of alternative generation sources to reduce greenhouse gas admission — while recognizing the interests of utility shareholders and non-self-generating customers — is a challenge for utilities throughout North America. In this session, hear from utilities and advocates on different ways to approach alternative rate design in order to educate consumers and have their best interest in mind.

Evolving Pricing Strategies for Emerging Technologies

Can the traditional Bonbright ratemaking model still work effectively in today’s utility business environment? How can we send appropriate pricing signals to consumers to change behaviors, and encourage them use energy more efficiently, but still fully recover utility costs? Can we successfully “unbundle” rates, and show customers what they are paying for? We’ll learn more about what PNM Resources is doing to support the growth of EVs and distributed generation across their customer base, including the concept of an “inverted” TOU rate.

Heidi Pitts, Senior Pricing Analyst, PNM Resources

Learnings and Best Practices from PG&E: Time-of-Use Residential Customer Outreach and Education

Pacific Gas and Electric Company has conducted two multi-year pilots to better prepare for full rollout of TOU rates to its diverse population of customer groups with consideration to varying climates, energy consumption habits, income and education levels, and language need. This presentation will detail PG&E’s go-to-market strategy, diversity of collateral and messages for residential customers, and results of each pilot towards achieving its goals.

Erika Wasmund, Principal Marketing Strategist, Residential Time-of-Use Rate Plans, Pacific Gas & Electric (PG&E)

Current Rate Strategies for APS and What’s on the Horizon

In May 2018 APS completed a first of its kind migration to a new suite of residential rates and this transition has accelerated the adoption of advanced residential rates in the APS service territory. In addition, APS introduced a new extra-high load factor rate with sustainability features for extra-large commercial customers. APS will file a new rate review in late 2019 so find out where APS may go from here in residential and commercial rate design. 

Leland Snook, Director, Rates & Rate Strategy, Arizona Public Service Company (APS)

A Look at Consumer Advocacy & Regulatory Considerations

This presentation will provide consumer advocate perspectives on whether net metered Distributed Generation (DG) customers pay an appropriate amount for grid access. If DG customers produce substantial cross subsidies, what solution best balances all consumer’s concerns?

Joe Rosenthal, Principal Attorney, Connecticut Office of Consumer Counsel

Residential Peak Time Rewards at Ameren Illinois

Ameren Illinois introduced its residential Peak Time Rewards (PTR) program in 2016. The program has experienced tremendous growth going from approximately 10,000 customers in its first year to over 100,000 customers in 2019. In this presentation, Keith Goerss will describe how PTR was designed and marketed, the mechanics of the program, and customer response to program event days.

Keith Goerss, Director, Rates & Analysis, Ameren Illinois

Performance Based Ratemaking (PBR)

Tuesday, October 8, 2019

12:30 – 1:00 p.m. :: Workshop Registration

1:00 – 4:30 p.m. :: Workshop Timing

Overview

The way we generate, distribute, consume, and pay for power today has been slowly evolving over the past decades. Customers are generating some of their own power, advanced metering structures allow for more sophisticated rate design, and large industrial—and even some residential customers—can actively adjust their demand in reaction to price signals and peak events. Because of this current environment and ever-changing consumer preferences, some regulators are looking at new PBR-like mechanisms to incentivize utilities to respond to these changing needs. 

Utilities must look for ways to recover enough revenue to provide a reasonable return for shareholders. States are looking at alternative ratemaking approaches, including performance-based regulation (PBR), to encourage consideration of third-party options, reduce frequency of rate cases, and decouple cost considerations from load changes. Join us for this PBR workshop where you’ll learn the principles of sound ratemaking and regulatory objectives, the need for PBR because of increasing DER and elements of a successful PBR mechanisms.

 

Agenda

• What is PBR and Why You Should Care?
  • History of PBR 
    • First implemented in 1990s, but was replaced with advent of multiyear plans/decoupling 
    • Examples
    • Lessons Learned: What worked and what didn’t work      
• Current Environment – What is Prompting the Need for Change?
  • Consumer preferences are changing; to incentivize utilities to respond to these changing needs, some regulators are looking at new PBR-like mechanisms
    • These will likely include new metrics, including sustainability, promotion of interconnection, and in some cases inclusion of local labor workforces
    • Increasingly, utilities will need to further demonstrate that capital investments have had a positive impact on customers, beyond traditional reliability measure
• Steps and Options for Implementing PBR
  • Design elements
  • Design considerations
• Case Studies
• Conclusions & Takeaways

 

Instructors

Tim Lyons, Partner, ScottMadden

Tim Lyons has more than 30 years of experience in the energy industry. Tim has held senior positions at several gas utilities and energy consulting firms. His experience includes rate and regulatory support, sales and marketing, customer service, and strategy development. Prior to joining ScottMadden, Tim was vice president of sales and marketing for Vermont Gas, where he was responsible for all customer-related functions, including sales and marketing, call center, and field service operations. He has also served as vice president of marketing and regulatory affairs for Providence Gas (now part of National Grid), director of rates at Boston Gas (also part of National Grid), and project director at Quantec, LLC, an energy consulting firm. Tim has testified before public utilities commissions in Connecticut, Maine, Maryland, Massachusetts, Rhode Island, and Vermont. Tim holds a B.A. from St. Anselm College, an M.A. in economics from The Pennsylvania State University, and an M.B.A. from Babson College.

Mark Meitzen, PhD, Senior Consultant, Christensen Associates

Mark Meitzen is a Senior Consultant at Christensen Associates, where he has been employed since 1990. Dr. Meitzen is currently serving as principal investigator on NCFRP24, Preserving and Protecting Freight Infrastructure and Routes. He was a principal author of the November 2008 Christensen Associates’ study of the U.S. freight railroad industry commissioned by the Surface Transportation Board. He was also the project manager and one of the principal authors of Christensen Associates’ supplemental report to the STB on railroad capacity and investment issues. Dr. Meitzen has expertise in the economic analysis of network industries including telecommunications, railroad, electricity and postal. In addition to the recent STB study, his work in the railroad industry includes analysis of railroad mergers and application of the STB’s Constrained Market Pricing standards, including its Stand-Alone Cost methodology.

Dr. Meitzen also serves as an economic expert in regulatory proceedings on incentive regulation, pricing and economic costing matters. He also has experience in civil litigation matters as an expert witness on antitrust, intellectual property and employment issues. Prior to joining Christensen Associates, Dr. Meitzen was a corporate economist at Southwestern Bell Telephone Company and was an assistant professor of economics at Eastern Michigan University and the University of Wisconsin-Milwaukee.

Riley Allen, Deputy Commissioner, Vermont Department of Public Service

Darren Epps, Product Development Specialist, Southern Company

John Fernandes, Senior Consultant – Emerging Technologies, Customized Energy Solutions (CES)

Keith Goerss, Director, Rates & Analysis, Ameren Illinois

Tim Jarrell, Vice President, Power Supply and Planning, Cobb EMC

David Kolata, Executive Director, Citizens Utility Board (CUB)

Barbara Lockwood, Vice President, Arizona Public Service (APS)

Eva Molnar, Senior Manager, Customer Programs & Services, Southern California Edison (SCE)

Heidi Pitts, Senior Pricing Analyst, PNM Resources

Andre Ramirez, Senior Advisor, Regulatory Affairs, Pricing Design & Research, Southern California Edison (SCE)

Joe Rosenthal, Principal Attorney, Connecticut Office of Consumer Counsel

Renee Samson, Director of Utility Solutions, ChargePoint Inc.

Leland Snook, Director, Rates & Rate Strategy, Arizona Public Service Company (APS)

Francesca Wahl, Manager, Policy and Business Development, Tesla

Erika Wasmund, Principal Marketing Strategist, Residential Time-of-Use Rate Plans, Pacific Gas & Electric (PG&E)

Cedric Wilson, Deputy Director General, Office of Utilities Regulation (OUR) Mark Carroll, Principal Analyst, Salt River Project

Steve Wishart, Manager, Pricing and Planning, Xcel Energy

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Utility Rate Design and the Influence of Emerging Technologies

October 7-8, 2019 | Phoenix,AZ

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