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Impact Of Alternative Rate Structures On Distributed Solar Customer Electricity Bills
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Book Synopsis Impact of Alternative Rate Structures on Distributed Solar Customer Electricity Bills by :
Download or read book Impact of Alternative Rate Structures on Distributed Solar Customer Electricity Bills written by and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Electric utilities are increasingly proposing changes to residential rate structures, in order to address concerns about their inability to recover fixed system costs from customers with grid connected distributed generation. The most common proposals have been to increase fixed charges, set minimum bills or instigate residential demand charges. This presentation provides results of an analysis to explore how these rate design alternatives impact electricity bills for PV and non-PV customers.
Book Synopsis Impact of Rate Design Alternatives on Residential Solar Customer Bills by :
Download or read book Impact of Rate Design Alternatives on Residential Solar Customer Bills written by and published by . This book was released on 2015 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: With rapid growth in energy efficiency and distributed generation, electric utilities are anticipating stagnant or decreasing electricity sales, particularly in the residential sector. Utilities are increasingly considering alternative rates structures that are designed to recover fixed costs from residential solar photovoltaic (PV) customers with low net electricity consumption. Proposed structures have included fixed charge increases, minimum bills, and increasingly, demand rates - for net metered customers and all customers. This study examines the electricity bill implications of various residential rate alternatives for multiple locations within the United States. For the locations analyzed, the results suggest that residential PV customers offset, on average, between 60% and 99% of their annual load. However, roughly 65% of a typical customer's electricity demand is non-coincidental with PV generation, so the typical PV customer is generally highly reliant on the grid for pooling services.
Book Synopsis The Efficiency and Distributional Effects of Alternative Residential Electricity Rate Designs by : Scott P. Burger
Download or read book The Efficiency and Distributional Effects of Alternative Residential Electricity Rate Designs written by Scott P. Burger and published by . This book was released on 2019 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Electricity tariffs typically charge residential users a volumetric rate that covers the bulk of energy, transmission, and distribution costs. The resulting prices, charged per unit of electricity consumed, do not reflect marginal costs and vary little across time and space. The emergence of distributed energy resources-such as solar photovoltaics and energy storage-has sparked interest among regulators and utilities in reforming electricity tariffs to enable more efficient utilization of these resources. The economic pressure to redesign electricity rates is countered by concerns of how more efficient rate structures might impact different socioeconomic groups. We analyze the bill impacts of alternative rate plans using interval metering data for more than 100,000 customers in the Chicago, Illinois area. We combine these data with granular Census data to assess the incidence of bill changes across different socioeconomic groups. We find that low-income customers would face bill increases on average in a transition to more economically efficient electricity tariffs. However, we demonstrate that simple changes to fixed charges in two-part tariffs can mitigate these disparities while preserving all, or the vast majority, of the efficiency gains. These designs rely exclusively on observable information and could be replicated by utilities in many geographies across the U.S.
Book Synopsis Forecasting the Impacts of Alternative Electricity Rate Structures by : D. McFadden
Download or read book Forecasting the Impacts of Alternative Electricity Rate Structures written by D. McFadden and published by . This book was released on 1976 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Putting the Potential Rate Impacts of Distributed Solar Into Context by : Galen Barbose
Download or read book Putting the Potential Rate Impacts of Distributed Solar Into Context written by Galen Barbose and published by . This book was released on 2017 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Concerns about the potential impacts of distributed solar on retail electricity prices have led to an array of proposals to reform rate structures and net-metering rules for solar customers. These proposals have typically been met with a great deal of contention and often absorb substantial time and administrative resources, potentially at the expense of other issues that may ultimately have greater impact on utility ratepayers (and over which state regulators and utilities might also have some control). Given these trade-offs, this paper seeks to help regulators, utilities, and other stakeholders gauge how much attention to devote to evaluating and addressing the possible effects of distributed solar on retail electricity prices.
Book Synopsis The Impact of Rate Design and Net Metering on the Bill Savings from Distributed PV for Residential Customers in California by :
Download or read book The Impact of Rate Design and Net Metering on the Bill Savings from Distributed PV for Residential Customers in California written by and published by . This book was released on 2011 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Net metering has become a widespread mechanism in the U.S. for supporting customer adoption of distributed photovoltaics (PV), but has faced challenges as PV installations grow to a larger share of generation in a number of states. This paper examines the value of the bill savings that customers receive under net metering, and the associated role of retail rate design, based on a sample of approximately two hundred residential customers of California's two largest electric utilities. We find that the bill savings per kWh of PV electricity generated varies by more than a factor of four across the customers in the sample, which is largely attributable to the inclining block structure of the utilities' residential retail rates. We also compare the bill savings under net metering to that received under three potential alternative compensation mechanisms, based on California's Market Price Referent (MPR). We find that net metering provides significantly greater bill savings than a full MPR-based feed-in tariff, but only modestly greater savings than alternative mechanisms under which hourly or monthly net excess generation is compensated at the MPR rate.
Book Synopsis Alternative Electric Power Rate Structure by :
Download or read book Alternative Electric Power Rate Structure written by and published by . This book was released on 1981 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Rate Design for the 21st Century by : Scott P. Burger
Download or read book Rate Design for the 21st Century written by Scott P. Burger and published by . This book was released on 2019 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: Electricity tariffs typically charge residential users a volumetric (that is, per-unit of electricity consumed) price that recovers the bulk of the costs of generating, transmitting, and distributing electrical energy. These tariffs also often include taxes and recover other costs associated with regulatory or policy measures. The resulting prices do not reflect the true social marginal costs of generating, transmitting, and distributing energy, capturing little or none of the temporal and geographic variability of marginal electricity costs. These inefficient rates incentivize customers to over-consume power during periods of peak system stress and under-consume power during periods of relatively low demand; this dynamic drives up power system costs, costing Americans and Europeans tens of billions of dollars annually. Critically, it leads to investments in long-lived and low-utilization infrastructure needed to meet peak demands. Economists have long argued for reforming rates, but progress has historically been slow. Today, less than one quarter of one percent of residential electricity customers in the United States pay a tariff that reflects the real-time price of energy. The emergence of distributed energy resources -- such as solar photovoltaics and battery energy storage -- has sparked renewed interest among regulators and utilities in reforming electricity tariffs. Efficient rates hold the potential to improve the economic efficiency of distributed energy resource installation and operation decisions. However, the economic pressure to redesign electricity rates is countered by concerns of how more efficient rate structures might impact different socioeconomic groups. In particular, regulators have been dubious of efforts to reform how the costs of network infrastructure (that is, transmission and distribution networks) are recovered, rejecting more than 75% of such efforts in the U.S. in 2017. Focusing on developed power systems in contexts like the U.S. and Europe, this Thesis examines the distributional impacts of rate reform and proposes methods to improve the economic efficiency of rates without creating undesirable distributional impacts. This Thesis also explores the distributional impacts of rooftop solar photovoltaics adoption under alternative rate designs. This Thesis leverages data on electricity consumption measured half-hourly for more than 100,000 customers in the Chicago, Illinois area, paired with Census data to gain unprecedented insight into the impacts of reforming electricity pricing across customers of varying socioeconomic statuses. This Thesis then builds a simple model of the local utility’s -- Commonwealth Edison’s -- cost of service, and simulates solar PV adoption under alternative rate designs, measuring the impacts on customers of differing income levels. This Thesis demonstrates that low-income customers would face increases in expenditures on average in a transition to rates that recover residual network and policy costs through economically efficient fixed charges. However, this Thesis demonstrates that simple changes to fixed charge designs can mitigate these disparities while preserving all, or the vast majority, of the efficiency gains. These designs rely exclusively on observable information and could be replicated by utilities in many geographies across the U.S. Rooftop solar PV adoption under tariffs with inefficient, volumetric residual cost recovery are shown to create substantial distributional challenges: PV adoption under such tariffs increases expenditures substantially for non-adopters, which tend to be predominately lower income customers; efficient tariffs prevent this regressive cost shifting. In short, failing to reform rates may lead to worse distributional outcomes than reforming rates, even if reforms are implemented naively. Collectively, the findings in this Thesis underscore the need for regulatory reform around electricity pricing, and chart a path forward for balancing economic efficiency and distributional equity in public utility pricing.
Book Synopsis Regulatory Issues for Distributed Generation by : Emanuel Aldebot
Download or read book Regulatory Issues for Distributed Generation written by Emanuel Aldebot and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.S. and global energy sectors are changing rapidly, considering concerns about climate change. Recent U.S. legislation provides substantial incentives for renewable energy, and individual states increasingly mandate and incentivize renewable technologies. A critical component of this movement toward renewable energy resides at the household level. A growing number of electricity consumers are installing solar panels on their rooftops and attempting to sell excess electricity from these panels back to the utility through the electric grid--a practice called net metering. A vast majority of states adopted net metering policies to build renewable infrastructure closer to electric customers, called distributed generation. Net metering's goal was to aid in developing a strategy for more renewable energy integration, encourage private investment, and harness the benefits distributed generation offers to the electrical grid. Although each state has different net metering laws, Pennsylvania found itself amid controversy over its net metering laws. Pennsylvania's net metering policy, called the Alternative Energy Portfolio Standards (AEPS) act, has a workaround that allows wholesale market participants (merchant generators) to qualify as a net metered facility, referred to as a customer-generator. The Public Utility Commission (PUC) of Pennsylvania addressed the workaround in an amendment restricting merchant generators from qualifying as customer-generator. The PUC based its concerns on the cascading financial impacts the workaround has on electric distribution companies (EDCs) and electric generation suppliers (EGSs). These financial impacts result in higher retail rates, disproportionately impact non-participating customers. However, solar developers claim that restricting the AEPS will unjustly stifle Pennsylvania's renewable growth. This action by the PUC prompted a legal case that addressed regulatory uncertainty faced by participants, EDCs, and EGSs when determining if a project should be approved (Sunrise Energy, LLC v. FirstEnergy Corp. and West Penn Power Company 2016). Also, it brought into question the impact the merchant generator workaround has on non-participating customers and the state's renewable growth goals. Ultimately, the courts decided to side with the original language of the AEPS and rejected the PUC's concerns about the impact of the merchant generator workaround ("Alternative Energy Portfolio Standards Act" 2007). The AEPS policy has a 15-year schedule that stops increasing renewable participation after 2020 (Sunrise Energy, LLC v. FirstEnergy Corp. and West Penn Power Company 2016). If Pennsylvania wants to expand net metering participation, it will need to revise its compensation structure and reconsider the detrimental impacts of the merchant generator workaround. Arizona took a different approach toward its net metering policy. Arizona decided to end net metering to create an equitable system that can scale rooftop solar without cascading financial impacts to utilities and shifting Avoided Costs to non-solar-owning customers. The Arizona commission explored two alternative compensation methodologies: Avoided Cost and Resource Comparison Proxy. The Avoided Cost Methodology, uses a five-year forecasting to evaluate eligible costs and values of energy, capacity, and other services delivered to the grid from distributed generation" (Pyper 2016). The Resource Comparison Proxy (RCP) methodology uses a "five-year rolling average of a utility's solar PPAs and utility-owned solar projects as a proxy for the valuation of distributed solar exports, to be reassessed every few years in each electric utility's rate case" (Pyper 2016). These methods are a step to accurately compensate for distributed generation and recognize its benefits to transmission, distribution, and generation.
Book Synopsis The Evidence from California on the Economic Impact of Inefficient Distribution Network Pricing by : Frank A. Wolak
Download or read book The Evidence from California on the Economic Impact of Inefficient Distribution Network Pricing written by Frank A. Wolak and published by . This book was released on 2018 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Charging full requirements customers for distribution network services using the traditional cents per kilowatt-hour (KWh) price creates economic incentives for consumers to invest in distributed generation technologies, such as rooftop solar photovoltaics, despite the fact that marginal cost of grid-supplied electricity is lower. This paper first assesses the economic efficiency properties of this approach to transmission and distribution network pricing and whether current approach to distribution network pricing implies that full-requirement customers cross-subsidize distributed solar customers. Using data on quarterly residential distribution network prices and distributed solar installations from California's three largest investor-owned utilities I find that larger amounts of distributed solar capacity and more geographically concentrated solar capacity predict higher distribution network prices and average distribution network costs. This result continues to hold even after controlling for average distribution network costs for the utility, Using these econometric model estimates, I find that 2/3 of the increase in residential distribution network prices for each of the three utilities between 2003 and 2016 can attributed to the growth distributed solar capacity. The paper then investigates the extent of the legal obligation that distributed solar generation customers have to pay for sunk costs of investments in the transmission and distribution networks. The paper closes with a description of an alternative approach to distribution network pricing that is likely to increase the economic signals for efficient electricity consumption and the incentive for cost effective installation of distributed solar generation capacity.
Book Synopsis Principles of Public Utility Rates by : James C. Bonbright
Download or read book Principles of Public Utility Rates written by James C. Bonbright and published by . This book was released on 1966 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Electricity from Renewable Resources by : National Research Council
Download or read book Electricity from Renewable Resources written by National Research Council and published by National Academies Press. This book was released on 2010-04-05 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt: A component in the America's Energy Future study, Electricity from Renewable Resources examines the technical potential for electric power generation with alternative sources such as wind, solar-photovoltaic, geothermal, solar-thermal, hydroelectric, and other renewable sources. The book focuses on those renewable sources that show the most promise for initial commercial deployment within 10 years and will lead to a substantial impact on the U.S. energy system. A quantitative characterization of technologies, this book lays out expectations of costs, performance, and impacts, as well as barriers and research and development needs. In addition to a principal focus on renewable energy technologies for power generation, the book addresses the challenges of incorporating such technologies into the power grid, as well as potential improvements in the national electricity grid that could enable better and more extensive utilization of wind, solar-thermal, solar photovoltaics, and other renewable technologies.
Book Synopsis Regulatory Considerations Associated with the Expanded Adoption of Distributed Solar by : Lori Bird
Download or read book Regulatory Considerations Associated with the Expanded Adoption of Distributed Solar written by Lori Bird and published by . This book was released on 2013 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: Increased adoption of distributed PV, and other forms of distributed generation, have the potential to affect utility-customer interactions, system costs recovery, and utility revenue streams. If a greater number of electricity customers choose to self-generate, demand for system power will decrease and utility fixed costs will have to be recovered over fewer kilowatt hours of sales. As such, regulators will need to determine the value and cost of additional distributed PV and determine the appropriate allocation of the costs and benefits among consumers. The potential for new business models to emerge also has implications for regulation and rate structures that ensure equitable solutions for all electricity grid users. This report examines regulatory tools and rate designs for addressing emerging issues with the expanded adoption of distributed PV and evaluates the potential effectiveness and viability of these options going forward. It offers the groundwork needed in order for regulators to explore mechanisms and ensure that utilities can collect sufficient revenues to provide reliable electric service, cover fixed costs, and balance cost equity among ratepayers -- while creating a value proposition for customers to adopt distributed PV.
Book Synopsis Techno-economic Methods for Analyzing the Energetic and Economic Effects of Solar, Storage, and Demand Response by : Arkasama Bandyopadhyay
Download or read book Techno-economic Methods for Analyzing the Energetic and Economic Effects of Solar, Storage, and Demand Response written by Arkasama Bandyopadhyay and published by . This book was released on 2020 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Growing population, changing climate, urbanization, and rising economic activities have led to an overall increase in electricity demand. Maintaining the balance between supply and this increasing demand often necessitates the usage of old, inefficient, and environmentally-polluting generators as well as the construction of expensive generation, transmission, and distribution infrastructure. Demand response initiatives (e.g. time-varying electricity prices) and distributed energy resources (DERs), like solar photovoltaic panels and onsite energy storage systems, can help offset a portion of this demand while simultaneously reducing harmful emissions. DERs additionally provide a variety of value streams including peak load reduction, energy arbitrage, real time price dispatch, demand charge reduction, congestion management, voltage support, etc. The impact of price-based demand response and DERs at the electricity distribution level is assessed in this dissertation through the following three studies: (1) quantifying the reduction in 4 coincident peak (4CP) loads and Transmission Cost of Service (TCOS) obligations of electric utilities using local distributed solar and storage, (2) evaluating the peak load reduction/shift potential of time-varying electricity pricing in the residential sector, and (3) investigating the combined energetic and economic potential of DERs and time-varying electricity pricing in the residential sector. When the Electric Reliability Council of Texas (ERCOT) peaks for a single 15-minute interval during each summer month between June and September, the loads of individual Distribution Service Providers (DSPs) in the same time interval are recorded. The averages of these DSP loads, defined as 4CP loads [1], are used to calculate TCOS obligations that each DSP must pay Transmission Service Providers (TSPs) in the next calendar year as compensation for using their transmission infrastructure. First, a generalized tool is built to forecast the change of 4CP loads and corresponding TCOS obligations for electric utilities within ERCOT based on varying amounts of solar and storage capacity. The tool is illustrated by using empirical electricity demand data from the municipally-owned utility in Austin, TX (Austin Energy) and solar generation data from the PVWatts calculator developed by the National Renewable Energy Laboratory. TCOS obligations can be on the order of tens of millions of dollars. Results indicate that solar and storage capacity can substantially lower these payments. For example, a 20 MW increase in local solar capacity in 2018 would reduce Austin Energy’s payment by an estimated $180,000 for each subsequent year. By using the novel approach of incorporating coincident peak demand charge reductions at the distribution level, the economic value of local generation and storage is highlighted. Next, a convex optimization model is developed to analyze the potential for time-varying electricity rate structures to reduce and/or shift peak demand in the residential sector. In this model, a household with four major appliances minimizes electricity costs, with marginally increasing penalties for deviating from temperature set-points or operating appliances at inconvenient times. The four specific appliances included are: heating, ventilation and air-conditioning (HVAC) systems, electric water heaters (EWHs), electric vehicles (EVs), and pool pumps (PPs). The study incorporates a one-parameter thermal model of the home and the electric water heater, so that the penalties can apply to the room and water temperatures rather than the total appliance loads. Analysis is performed on a community of 100 single-family detached homes in Austin, TX. These homes each host a combination of the four end-use devices while some also have onsite solar panels. Results show that dynamic pricing effectively shifts the residential peak away from the time of overall peak load across the electricity system, but can have the adverse impact of making the residential peak higher. The energy consumption does not differ significantly across the different rate structures. Thus, it can be inferred that the time-varying rates encourage customers to concentrate their electricity demand within low-price hours to the extent possible without incurring significant inconvenience. By incorporating the novel approach of including monetary value of customer behavior in price-based demand response models, this study builds a tool to realistically quantify peak load reduction and shifts in the residential sector. Finally, the convex optimization model is extended to consider larger sets of distributed technologies that might be deployed in homes and investigate how different combinations of these technologies affect peak grid load, energy consumption from the grid, and emissions in the residential sector under time-varying pricing structures. In the model, households with varied amalgamations of distributed energy technologies minimize electricity costs, amortized capital, and operational costs over a year, with marginally increasing penalties for deviating from room temperature set-points. The four technologies considered are: solar photovoltaic (PV) panels, lithium-ion batteries, ice cold thermal energy storage (CTES), and smart thermostats. Results show that from an economic perspective, it is optimal for residential customers to install solar panels under tiered rates, time-of-use rates, and critical peak prices while it is cheapest to own a combination of solar panels and smart thermostats when real-time prices and demand charges are in effect. The capital and installation costs of both storage systems are still too high to make them economically profitable investments for typical residential customers. Additionally, solar panels are the main instruments to reduce energy purchased from the grid and carbon dioxide emissions under all pricing schemes. Adding smart thermostats can reduce these metrics to a greater extent by making the home energy-efficient. Further, while the energetic effect of the two storage systems can be favorable or detrimental depending upon the load profile of the particular household and the pricing structure, lithium-ion batteries are the main instruments to avoid high demand charges by spreading the demand in the home (and power bought from the grid) evenly to the extent possible without incurring significant customer discomfort. Thus, this study recommends that residential customers invest in solar panels and smart thermostats to minimize overall annual expenditure and make their homes environmentally efficient. Further, as an effective peak load control mechanism, electric utilities should offer significant rebates to encourage residential customer investment in storage systems in addition to subjecting them to demand charges. Electricity generation from intermittent renewable energy sources has grown rapidly worldwide. DER installation levels continue to rise with the decline in capital costs of energy storage systems and local renewable generation assets, the growth of supportive government policies, and rising concerns about climate change among the masses. Additionally, electric utilities are increasingly employing demand response initiatives to curtail and/or shift peak demand. As a whole, the body of work developed in this dissertation can be used by electric utilities to make optimal decisions about dynamic rate design and policies for increased DER adoption. It can also be used by residential electricity customers to maneuver their own energy consumption patterns and assess the economic viability of investing in DERs
Book Synopsis A Tale of Two Solar Installations by : Heather Payne
Download or read book A Tale of Two Solar Installations written by Heather Payne and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: While renewable energy and distributed generation has and will likely continue to grow, state policies have a significant effect on adoption rates. Renewable portfolio standards and tax credits could continue to encourage penetration of these technologies. Customers cite energy independence and control over energy bills as drivers for installing distributed generation. Net metering - the ability of customers to be paid for the excess electricity they generate - is typically thought of as easy to understand. However, state policies are inconsistent across a number of factors, which discourage adoption for a variety of reasons. In addition to discussing the sometimes absurd differences between state-level policies, the differences demonstrate best practices that all states should adopt. Interconnection - the ability to allow two-way electricity flows - goes along with net metering, and has its own set of state-level policy challenges. No state will consciously choose to be less resilient. However, many are doing precisely that with their distributed generation policies. The problem is how the public utility commissions and utilities themselves are responding to the challenges, mostly economic, posed by increased distributed generation. Using Germany and policies adopted by individual states, the paper proposes what policies states can implement to promote resiliency, both by their citizens and themselves.
Book Synopsis Reinventing Electric Utility Regulation by : Gregory B. Enholm
Download or read book Reinventing Electric Utility Regulation written by Gregory B. Enholm and published by Public Utilities Reports. This book was released on 1995 with total page 516 pages. Available in PDF, EPUB and Kindle. Book excerpt: Learn from this collection of thought-provoking commentary on change and electric regulatory reform from executives, state regulators, and federal commissioners in the regulatory community. Plus, perspectives from other players -- the utilities governed by these regulators, the financial community (rating agencies), independent power producers, and public power.
Book Synopsis An Evaluation of Economists' Influence on Electric Utility Rate Reforms by : Jan Paul Acton
Download or read book An Evaluation of Economists' Influence on Electric Utility Rate Reforms written by Jan Paul Acton and published by . This book was released on 1982 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper traces the role economists played in getting data, analyzing data, and evaluating alternative rate structures. In an attempt to assess the effectiveness of economists in this process, I focus on how our profession influenced the arguments put forth and the nature of the evidence used in the debate--not on whether the outcomes in terms of rates were those proposed or preferred by economists. (Author).
