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Customer Concerns with Implementing Demand Rates NASUCA and NARUC Conferences Austin, Texas November 2015 David Springe Consumer Counsel Kansas Citizens’ Utility Ratepayer Board. Don’t believe the Rhetoric.
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Customer Concerns with Implementing Demand Rates NASUCAand NARUC ConferencesAustin, TexasNovember 2015 David Springe Consumer Counsel Kansas Citizens’ Utility Ratepayer Board
Don’t believe the Rhetoric • “It is widely agreed that existing tariffs do not reflect the cost structure of providing electricity service to customers” = FALSE • “Consumer advocates refuse to discuss changes to rate design” = FALSE
What is the Objective? • Collect costs through fixed charges? • Raising customer charges is unpopular • Demand charges achieve same result if you can’t actually avoid them • Achieve better efficiency through demand prices? • Must be based on coincident peak • Must remove other price suppression measures • Must ask-”is there a better way to do this?”
Legitimate Concerns • Higher bills for low use customers • Low use customers may be low income • Limited ability to change usage • Some things must run (AC, Refrig, Med) • Difficult to understand • Difference between broad concept and actual understanding of KW use
Legitimate Concerns • Smart meters don’t read KW’s • Residential has more diversity than large commercial or industrial • Very difficult to calculate correct KW rate in ratemaking process
August Billing Cycle: Daily kWh usage vs Daily System Peak (MW) SUNDAY WEDNESDAY SUNDAY THURSDAY
August 7, 2014 kWh usage (15 minute increments) vs Hourly System Load (MW)
Volumetric rates • Do allocate costs rather elegantly • Customers do understand kWh’s • Smart meters actually read kWh’s • Can set discrete pricing times to send better price signals • Can give same education as demand rates to achieve same goal
Conversation Checklist • What is the objective? • What is the specific plan? • Does the plan support the objective? • Does the data/evidence support the plan and objective? • Is there a easier/better way? • Protections for vulnerable customers? • 2nd and 3rd order concerns
Contact Information David Springe Consumer Counsel Citizens’ Utility Ratepayer Board 1500 S.W. Arrowhead Rd Topeka, Kansas 66604 785-271-3200 785-271-3116 (fax) Email: d.springe@curb.kansas.gov http://curb.kansas.gov david.springe@nasuca.org