Rate Design Matters… A Lot

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Presentation transcript:

Rate Design Matters… A Lot DC Rate Design Matters… A Lot Autumn Proudlove Senior Policy Analyst NC Clean Energy Technology Center Solar Power International September 14, 2016

Residential Rate Design Action: Q1 & Q2 2016 Q1 or Q2 2016 action No recent action DC Utilities in 30 States + DC took action on residential fixed charges or demand charges 2

Fixed Charges A fixed charge - also known as a “customer charge” – is typically a flat monthly fee on a customer’s bill. Fixed charges may also be tiered (different fee based on usage bracket) or a flat fee per day. Fixed charges can typically not be offset by net metering credits.

Q2 2016 Proposed Increases to Residential Fixed Charges Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering No Proposed Fixed Charge Increase in Q2 2016 ≥1 Pending Fixed Charge Increase in Q2 2016 ≥1 Decision on a Fixed Charge Increase in Q2 2016 DC 42 Utilities in 25 States + DC had pending or decided requests to increase residential fixed charges during Q2 2016 4

Fixed Charge Increases: Q2 2016 42 utilities in 25 states + DC had pending or decided proposals to increase residential fixed charges by at least 10% Median existing fixed charge = $8.25 Median proposed fixed charge = $13.76 Median proposed increase = 50% 6 DECISIONS in Q2 2016: 4 utilities not granted any increase, 2 granted increase below requested amount NO utilities granted full requested increase

Fixed Charge Trends Since Q4 2014: No Proposed Fixed Charge Increase ≥1 Pending or Decided Fixed Charge Increase from an IOU Since Q4 2014: 81 pending or decided proposals to increase fixed charges by at least 10% from 71 investor-owned utilities across 34 states ≥1 Pending or Decided Fixed Charge Increase from a Large Muni or Co-op (>100,000 customers)

Fixed Charge Increase Proposals: %s chronologically  2014 ----- 2016 

Fixed Charge Decisions No Action No Increase Approved Partial Increase Approved Full Increase Approved 46 decisions from Q4 2014 to Q2 2016

IOU Fixed Charge Decisions Q4 2014 – Q2 2016

Fixed Charge Decisions: Partial Increases [Q4 2014 – Q2 2016] No partial increases granted 1%-24% of requested increase granted 25%-49% of requested increase granted 50%-74% of requested increase granted 75%-99% of requested increase granted 50% 67%; 40% 75%; 68% CT: 66% 48% 40% MD: 91% 60%; 83% 82% 63% PA: 66% 47% 59% 49% 73% 29% 10

Multiple Requests 11 utilities have had more than one fixed charge increase request pending since Q4 2014 4 initial requests denied, came back & requested smaller increase 2 initial requests denied, came back & requested larger increase 4 received partial increases, came back & requested increase larger than first proposal 1 received full increase, came back & received second partial increase Some utilities trying again with a smaller request Others getting a partial increase and trying again with a larger request

Fixed Charge Trends Not seeing a slowdown in utility requests to increase fixed charges Very few utilities are being granted their full increase – even split between no increase & partial increase Those being granted only a partial increase are getting, on average, about 60% of their requested increase

Demand Charges A demand charge is typically a monthly charge based on a customer’s maximum demand in kW during the billing period. Demand charges are typically based on a customer’s non- coincident peak demand, but may be designed to be based on coincident peak demand. Like fixed charges, demand charges cannot typically be offset by net metering credits.

Q2 2016 Proposed Demand Charges on Residential Solar Customers Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering No Proposed Demand Charge in Q2 2016 ≥1 Pending Demand Charge in Q2 2016 ≥1 Decision on a Demand Charge in Q2 2016 7 Utilities in 5 States had pending demand charge requests during Q2 2016 14

Since Q4 2014: Proposed Demand Charges on Residential Solar Customers Customer Credits for Monthly Net Excess Generation (NEG) Under Net Metering No Demand Charge Proposal ≥1 Proposed Demand Charge 14 Utilities in 10 States had pending demand charge requests during since Q4 2014 15

Demand Charges: Decisions Since Q4 2014 (when we started tracking), no PUC has approved a demand charge on residential solar customers of an IOU. Only munis and co-ops have implemented demand charges on these customers. Salt River Project (AZ): $6.95/kW Lakeland Electric (FL): $4.80/kW Intermountain Rural Electric Assn. (CO): $4.04/kW Delaying decisions until broader proceedings are complete UNS in Arizona Unitil in New Hampshire

Demand Charge Trends Very few proposals being put forward right now, but a lot of discussion No residential demand charges yet approved for investor-owned utilities Some recent collaborative efforts to reach settlement agreements or efforts to look at the bigger picture before making a decision