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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. Traditional Rate Structures Innovative Rate Structures

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PRICE SIGNALS AND METERING

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  1. Conservation or CRISIS A Northwest Choice Conservation or CRISIS A Northwest Choice PRICE SIGNALS AND METERING “Retail Rate Issues” Steve Shurbutt GDS ASSOCIATES, INC.

  2. RETAIL RATE ISSUESOverview • Traditional Rate Structures • Innovative Rate Structures • BPA Innovative Rate Pilot Program • Purpose • Targeted Customer Classes • Parameters • Results GDS Associates, Inc.

  3. 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.

  4. 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.

  5. TRADITIONAL RATE STRUCTURESDemand Pricing Alternatives • Non-Coincident Peak • Monthly • Seasonal • Ratcheted • Time-of-Day • Coincident Peak • Interruptible GDS Associates, Inc.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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.

  11. 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.

  12. Determination of Inverted Block RatesResidential (¢/kWh) GDS Associates, Inc.

  13. Residential Inverted BlockAlternative 1 GDS Associates, Inc.

  14. Residential Inverted BlockAlternative 1 GDS Associates, Inc.

  15. Residential Inverted BlockAlternative 2 GDS Associates, Inc.

  16. Residential Inverted BlockAlternative 2 GDS Associates, Inc.

  17. Determination of Time-of-Season RatesResidential (¢/kWh) GDS Associates, Inc.

  18. Residential Time-of-SeasonAlternative 1 – On-Peak GDS Associates, Inc.

  19. Residential Time-of-SeasonAlternative 1 – Off-Peak GDS Associates, Inc.

  20. Residential Time-of-SeasonAlternative 1 GDS Associates, Inc.

  21. Residential Time-of-SeasonAlternative 2 – On-Peak GDS Associates, Inc.

  22. Residential Time-of-SeasonAlternative 2 – Off-Peak GDS Associates, Inc.

  23. Residential Time-of-SeasonAlternative 2 GDS Associates, Inc.

  24. Determination of Time-of-Day RatesResidential (¢/kWh) GDS Associates, Inc.

  25. Average Residential Price GDS Associates, Inc.

  26. Average Commercial Price GDS Associates, Inc.

  27. Residential DemandAlternative 1 GDS Associates, Inc.

  28. Residential DemandAlternative 2 GDS Associates, Inc.

  29. Residential % Change to Status QuoAlternative 1 GDS Associates, Inc.

  30. Residential % Change to Status QuoAlternative 2 GDS Associates, Inc.

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