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Panelists Cover Rates and Users and Regulators Respond

Brian Greene co-managing member of the firm, spoke on the “response panel” at the Mid-Atlantic Distributed Resources Initiative Working Group Meeting. Brian’s panel responded to presentations made by an earlier panel involving rate design issues and retail price integration. Entitled “Retail Rate Design for Default Energy Service,” and held at the offices of District of Columbia Public Service Commission on March 22, 2016, the subject is a hot topic among utilities and utility commissions around the country because of the effect that various rate design elements (e.g., fixed charges, demand charges, energy charges, etc.) have on consumer bills and consumer decisions regarding distributed energy resources.

Brian’s comments were, in large part, focused on the various products and services available in today’s competitive retail electricity market in states where consumers have the right to choose their energy supplier. Brian also discussed the importance of allowing retail suppliers access to their own customers’ smart meter data on a next-day basis or sooner. Suppliers today have the ability to process enormous amounts of data relating to energy usage and present the data to their customers in a way that the customer can understand it. These products, combined with data access and today’s technology, empowers customers to better understand and take control over their energy usage.

Brian also spoke about the need for proper cost allocation among default energy service and distribution service. In many states, customers that their electricity from a retail supplier continue to pay the utility’s costs related to the provision of default service even though the customer is not taking default service. That is because many default service costs are embedded in regulated delivery service rates and have not been properly allocated to default service. As an example, a portion of a utility’s call center is used for default service related activity, but typically the utility recovers those costs in delivery service rates. This means that the default service rate does not include all of the utility’s costs to provide that service, which is important because a retail supplier must include these same types of costs in its prices that it charges to its customer and cannot rely on a guaranteed income stream.

After lunch, the initial panel and the response panel fielded questions from the audience.

If you would like to know more about retail rate design issues or anything related to the energy distribution industry, please contact Bran or any of the energy lawyers at our firm.