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Conservation or CRISIS A Northwest Choice. Conservation or CRISIS A Northwest Choice. PRICE SIGNALS AND METERING. “Retail Rate Issues” Steve Shurbutt GDS ASSOCIATES, INC. RETAIL RATE ISSUES Overview. Traditional Rate Structures Innovative Rate Structures

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PRICE SIGNALS AND METERING

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Price signals and metering

Conservation or CRISIS

A Northwest Choice

Conservation or CRISIS

A Northwest Choice

PRICE SIGNALS AND METERING

“Retail Rate Issues”

Steve Shurbutt

GDS ASSOCIATES, INC.


Retail rate issues overview

RETAIL RATE ISSUESOverview

  • Traditional Rate Structures

  • Innovative Rate Structures

  • BPA Innovative Rate Pilot Program

    • Purpose

    • Targeted Customer Classes

    • Parameters

    • Results

GDS Associates, Inc.


Traditional rate structures decades of change

TRADITIONAL RATE STRUCTURESDecades of Change

  • 1960’s – Promotion (growth)

  • 1970’s – Inflation ( conservation)

  • 1980’s – Marketing (utility aggressive)

  • 1990’s – Competition ( customer aggressive)

  • 2000’s – Survival ( ? ? ? )

GDS Associates, Inc.


Traditional rate structures standard rate components

TRADITIONAL RATE STRUCTURESStandard Rate Components

  • Customer Charge

    • Metering and Billing ($3.00)

    • Minimum Distribution System ($15.00)

  • Demand and Energy Charges

    • Generation

    • Transmission

    • Distribution

    • Return

GDS Associates, Inc.


Traditional rate structures demand pricing alternatives

TRADITIONAL RATE STRUCTURESDemand Pricing Alternatives

  • Non-Coincident Peak

    • Monthly

    • Seasonal

    • Ratcheted

  • Time-of-Day

  • Coincident Peak

  • Interruptible

GDS Associates, Inc.


Traditional rate structures energy pricing alternatives

TRADITIONAL RATE STRUCTURESEnergy Pricing Alternatives

  • Declining Block

  • Flat

  • Inverted Block

  • Time-of-Season

    • Winter Months

    • Summer Months

  • Time-of-Day

    • On-Peak Hours

    • Off-Peak Hours

GDS Associates, Inc.


Innovative rate structures current and future

INNOVATIVE RATE STRUCTURESCurrent and Future

  • Demand (Commercial and Industrial)

    • Curtailment

    • Buy Back

    • Real-Time Pricing

  • Energy (Residential)

    • Conservation Credit

    • Inverted Block

      • Base Rates

      • Power Cost Adjustment

    • Time-of-Use (seasonal, daily)

    • Renewable Resources

    • Real-Time-Pricing

GDS Associates, Inc.


Bpa pilot program purpose

BPA PILOT PROGRAMPurpose

  • Promote Conservation via Retail Rate Price Signals

  • Enhance Retail Utilities’ Knowledge

    • General Understanding of Rate Structures

    • Awareness of PNW Rate Structures

  • Introduction to Innovative Rates

    • Benefits

    • Barriers to Implementation

  • User-Friendly Innovative Rate Evaluation Tool

    • Revenue Impacts

    • Demand Impacts

GDS Associates, Inc.


Bpa pilot program targeted customer classes

BPA PILOT PROGRAMTargeted Customer Classes

  • Residential

  • Small Commercial

    • Less Than 50 kW

      Note: Many programs are already in place for individual customers, irrigation customers, etc.

GDS Associates, Inc.


Bpa pilot program parameters

BPA PILOT PROGRAMParameters

  • Promote Conservation

    • Peak Demand

    • High-Priced Energy

  • Immediate Implementation

    • Standard Metering

    • Existing Billing Systems

  • Relatively Easy to Administer

    • Retail Utility Staff

    • Customer Education

GDS Associates, Inc.


Bpa pilot program results

BPA PILOT PROGRAMResults

  • Spreadsheet Model Developed

    • Structures: Inverted, Time-of-Season, Time-of-Day

    • Energy Use Data from BPA ELCAP Study

    • Elasticities from US DOE/EIA

  • Innovative Rate Examples Developed

    • Based on Sample Utility Data

    • Achieve Material Demand Reductions

      • Static 2000 Price – Before 2001 BPA Rate Increase

      • Status Quo Price – Uniform ¢/kWh WPC Recovery

      • Innovative Rate Price

GDS Associates, Inc.


Determination of inverted block rates residential kwh

Determination of Inverted Block RatesResidential (¢/kWh)

GDS Associates, Inc.


Residential inverted block alternative 1

Residential Inverted BlockAlternative 1

GDS Associates, Inc.


Residential inverted block alternative 11

Residential Inverted BlockAlternative 1

GDS Associates, Inc.


Residential inverted block alternative 2

Residential Inverted BlockAlternative 2

GDS Associates, Inc.


Residential inverted block alternative 21

Residential Inverted BlockAlternative 2

GDS Associates, Inc.


Determination of time of season rates residential kwh

Determination of Time-of-Season RatesResidential (¢/kWh)

GDS Associates, Inc.


Residential time of season alternative 1 on peak

Residential Time-of-SeasonAlternative 1 – On-Peak

GDS Associates, Inc.


Residential time of season alternative 1 off peak

Residential Time-of-SeasonAlternative 1 – Off-Peak

GDS Associates, Inc.


Residential time of season alternative 1

Residential Time-of-SeasonAlternative 1

GDS Associates, Inc.


Residential time of season alternative 2 on peak

Residential Time-of-SeasonAlternative 2 – On-Peak

GDS Associates, Inc.


Residential time of season alternative 2 off peak

Residential Time-of-SeasonAlternative 2 – Off-Peak

GDS Associates, Inc.


Residential time of season alternative 2

Residential Time-of-SeasonAlternative 2

GDS Associates, Inc.


Determination of time of day rates residential kwh

Determination of Time-of-Day RatesResidential (¢/kWh)

GDS Associates, Inc.


Average residential price

Average Residential Price

GDS Associates, Inc.


Average commercial price

Average Commercial Price

GDS Associates, Inc.


Residential demand alternative 1

Residential DemandAlternative 1

GDS Associates, Inc.


Residential demand alternative 2

Residential DemandAlternative 2

GDS Associates, Inc.


Residential change to status quo alternative 1

Residential % Change to Status QuoAlternative 1

GDS Associates, Inc.


Residential change to status quo alternative 2

Residential % Change to Status QuoAlternative 2

GDS Associates, Inc.


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