EFFICIENT PRICING OF STANDBY DISTRIBUTION SERVICES. Presented to Edison Electric Institute Distributed Generation Task Force Milwaukee, Wisconsin By Kelly Eakin, Vice President Laurits R. Christensen Associates, Inc. June 20, 2001.
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Edison Electric Institute
Distributed Generation Task Force
Kelly Eakin, Vice President
Laurits R. Christensen Associates, Inc.
June 20, 2001
Claim: “On-Site Generators Are Different – Rate Design Should Be Different”
Response:No. From a distribution service rate design perspective, they are the same as other customers that relies on the system to deliver power consumed from the grid
Claim: “Coincident Peak (CP) Method is a superior method to allocate fixed costs to OSGs.”
Response: CP was useful to allocate generation before the days of hourly pricing. However, CP approach not appropriate for distribution services
Claim: “Fixed charges will discourage new generation. Rates policy should encourage generation.”
Response: Efficient rates for standby will encourage efficient on-site generation while discouraging uneconomic bypass.
Questions & Discussion