How to Help Your Customers Read Their Electric Bills and Apply for Incentives Charley Budd, KEMA

What We Will Cover Today Raise understanding of electric bills –Describe what is relevant for selling energy efficiency –Show what to look for on an electric bill Provide a brief overview of ratemaking concepts –Link cost causation to rate design Illustrate with examples of ComEd bills Note: Will not cover information on utility rate proceedings, legislative initiatives, or forecasts of future prices or costs

How Ratepayer Funding Works Energy Efficiency Programs charge on your monthly bill Based on kWh usage How much is your customer contributing?

What This Means to Your Customers… Their electric bills show they pay for the programs, and how much they pay. Customers “paying into” the program can get far more out of it than they pay in: –Cash incentives (up to 50% of project cost) reduce their up-front investment in their energy efficiency projects. –Energy savings from their projects will reduce their monthly electric bills. Note: ComEd “delivery” customers are eligible for Smart Ideas incentives, which also means that customers of ComEd who purchase their electricity “supply” from Retail Electric Suppliers (RES) are eligible.

Ratemaking Concepts Cost Causation and Rate Design –The challenge is to understand the nature of the costs of providing electric service and translate that into rates that are fair and equitable to both the utility and its customers. –While cost causation may be the fundamental starting point, the different and diverse perspectives of customers, utilities, public officials and other stakeholders add complexities and disagreement. In the end, it comes down to rates and bills, so it is helpful to have some basic understandings of rates and costs in order to understand the value of energy efficiency. Energy efficiency is all about saving on the electric bill! So, let’s get started with some electricity basics…

Energy Basics Kilowatt (kW) –kW is a measure of demand –A unit of power equal to 1,000 watts –Similar to the speedometer of your car, which shows how fast you’re going at any one moment Kilowatt-hour (kWh) –kWh is a measure of energy consumption per hour –Similar to the odometer on your car, which measures miles traveled

kW and kWh (kW) (kWh)

Customers Have kW and kWh Charges

The Electric Bill

Supplier charges are additional and will be applied to the 417,456 kWh

Ratemaking Process: A Simplified View Functional Assignment Classification Rate Design

All Costs Generation Costs Distribution Costs Other Functional Assignment Transmission Costs Classification Rate Design

Electric System

Classification of Costs Energy related costs vary with the consumption of energy Demand related costs vary with the capacity requirements of customers Customer related costs vary with the number of customers served specifically assigned (e.g. customer specific equipment)

Electric System

All Costs Generation Costs Distribution Costs Other Demand Energy Demand Customer Functional Assignment Classification Rate Design Demand Transmission Costs

All Costs Generation Costs Distribution Costs Other Demand Energy Demand Customer Functional Assignment Classification Energy Charge cents per kWh Demand Charge $ per kW Customer Charge $ per month Rate Design Demand Transmission Costs

For general program information and application forms: Questions about eligibility, specifications, how to fill out applications, finding a trade ally, and anything else: (888) Fax: For Answers to Your Questions...

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