1. 2015 UNS Rate Case – DG Trends in Action
Lon Huber, Director
June 7, 2016

2. UNS Proposed: For non-DG customers For solar customers
5.8 cents/kWh offset with a demand charge ($6/kW & $9.95/kW after 7 kW)
24/7 demand charge
Hourly exports at 5.9 cents/kWh linked to utility scale PV
Energy offset is somewhat arbitrary
Typical opening position

3. Solar Proposed:
Status Quo NEM
Maybe explore minimum bill
Look into a optional TOU rate
Equal treatment

4. RUCO Principles Do not inhibit conservation related price signals
Reduce reliance on fixed charges
Don’t rock the boat for 98% of UNS ratepayers
No drastic changes
Send more accurate price signals to DG
DG neutral demand based TOU
Create options for future solar customers
RPS compliance driven fixed solar credit

5. DG Customers are Different
After a certain point of self generation, DG customers are partial requirements customers:
Masks load only during certain times and weather conditions
Exports electrons to the distribution system
Comes in and out of needing service unlike energy efficiency
Can completely erase a monthly bill
Impacts are mimics throughout the service territory at high penetrations
Intra class equity and exclusivity issues

6. RUCO’s Proposal For DG Solar Customers
Three options:
Advanced DG rate
RPS Credit Option
Self consumption option

7. Avoided Costs from DG
Followed Commission guidance on value of solar to determine starting rate.
Gauge the value of solar by comparing it to the next marginal unit of generation needed to meet system peak.
Straightforward to estimate once methodology chosen:
Energy
Capacity (assumed direct offset)
Transmission related to capacity
Environmental (mostly baked in avoided costs)
Unknown or highly variable:
Distribution
System Transmission

8. 2014 IRP
Need new CT

9. LCOE of Units on the Margin

10. Aligning to system need

11. kWh usage per hour by the average customer
Summer Peak
kWh usage per hour by the average customer
January July December

12. Peak Hours: 2:00 PM to 7:59 PM

13. Proposal For DG customers – Advanced DG Demand Rate
Three core components
$12 minimum bill
8.5 cent/kWh offset
UNS IRP based value of solar
Summer based demand charge TOU ~ $16.5 kW
Monthly NEM with export

14. Option B for Solar Customers
UNS has a residential renewable energy target.
The utility needs ~10 MW of additional DG
Create a procurement mechanism that drives costs down.
Buy-all sell-all credit structure.
Declining trigger based on capacity installed.
Similar structure to incentive programs.
Fixed 20 year rate that appears as bill credit.

15. REST Procurement Mechanism
The price averages 8.5 cents/kWh (the value of solar) and the declines are set at the historic yearly system decline rate

16. Bombshell

17. Staff Proposed:
Temporary 15% load factor floor to protect customers against adverse effects
Company to build a communication and outreach plan
For all customers
$5.15/kw monthly demand charge
$15/mo fixed charge
Company Jumped Onboard!
Basic Service Charge
All kW
All kWh
Winter off peak
Winter on peak
Summer off peak
Summer on peak
$15.00
$5.15 $ $ $ $ $

18. Public Outcry

20. Next Up

21. Questions?

22. Linking to Bonbright
Simplicity, understandability, public acceptability and feasibility of application and interpretation
Stability of rates themselves, minimal unexpected changes that are seriously adverse to existing customers
Fairness in apportioning cost of service among different consumers
Avoidance of “undue discrimination”
Efficiency, promoting efficient use of energy and competing products and services

23. KW Charge Similar to Commercial
Large Power Service Time-of-Use (LPS-TOU)