By - Jon Brown

Introduction to Rate Design for Electric Utilities
July 27-28, 2016 | Chicago, IL

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This two-day course will introduce rate design concepts to participants. The course will build upon information discussed and developed in the Introduction to Cost-of-Service Concepts and Techniques for Electric Utilities course. Each participant will work through sample rate design exercises during the course. Training materials will be provided.

Who Should Attend

This course is recommended for policymakers, managers, attorneys, regulators, key account representatives, accountants, engineers, and analysts who would like introductory, hands-on training related to rate design concepts for electric utilities.


No prior rate design experience is required, although knowledge of utility system infrastructure, business environment, and operations will be helpful. To participate in model development, a laptop computer with Microsoft Excel 2003 or later is required.


AP_LogoEUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.4 CEUs for this course.


Wednesday, July 27, 2016

7:30 – 8:00 a.m. :: Registration and Continental Breakfast

8:00 – 8:30 a.m. :: Course Overview and Introduction
  • Introduction
    • Building on cost of service
    • Overlap
    • Background and requirements
  • Instructors
  • The process
8:30 – 9:30 a.m. :: General Ratemaking and Regulatory Principles
  • Introduction
  • Bonbright principles
  • Regulations
  • Factors
  • Objectives
  • Ratemaking guidelines
    • Factors
    • Rate adjustments
    • Competing objectives
  • Equity
  • Rate levels
  • Social engineering
  • Competition
  • Simplicity
9:30 – 10:30 a.m. :: Electric Utility Pricing: Trends That Matter
  • Fundamental trends affecting electric utility pricing
    • Global changes
    • Utility environment
    • Advanced metering infrastructure
    • Customer environment
  • Pricing interface
  • Pricing implications of risk
  • Transactional risk
    • Decoupling
  • Risk management strategies
  • Pricing strategies
  • Storage
  • Solar rate considerations/ value of solar

10:30 – 10:45 a.m. :: Morning Break

10:45 – 11:45 a.m. :: Electric Utility Pricing: Trends That Matter (cont.)
  • Classroom exercise No. 1: special rate design – solar installation

11:45 a.m. – 12:45 p.m. :: Group Luncheon

12:45 – 2:00 p.m. :: Applying Cost-of-Service Results
  • Cost-of-service overview
  • Developing cost curves
    • Bundled embedded cost
    • Unbundled embedded cost
    • Marginal cost
  • Evaluation of competitive alternatives
  • Classroom exercise No. 2: developing cost curves

2:00 – 2:15 p.m. :: Afternoon Break

2:15 – 3:30 p.m. :: Traditional Rate Design
  • Rate overview
  • Flat rate (energy only)
  • Two-part rate (customer/energy or energy/demand)
  • Three-part rate (energy/demand/customer)
  • Blocked rates
    • Declining
    • Inverted/inclining
  • Wright rate
  • Relationship between rate design and cost curves
  • Classroom exercise No. 3: designing bundled rates
3:30 – 4:00 p.m. :: Unbundled Rate Design
  • Unbundled rate overview
  • Traditional bundled vs. unbundled
  • Unbundling strategies



Thursday, July 28, 2016

7:30 – 8:00 a.m. :: Continental Breakfast

8:00 – 8:30 a.m. :: Review of Wednesday

8:30 – 9:15 a.m. :: Marginal Cost Pricing
  • Resources
  • Application and use
  • Short run and long run
  • Marginal capacity costs
  • Production cost modeling
  • Marginal energy costs
  • Marginal transmission costs
  • Plant investment method
  • Planning method
  • Marginal distribution costs
  • Revenue reconciliation
  • Inverse elasticity method
  • Differential adjustment method
  • Lump sum method
  • Equi-proportional method
  • Dilemma of reconciliation
9:15 – 10:15 a.m. :: Special Rate Provisions
  • Minimum bills
  • Demand ratchets
  • Power factor
  • Service voltage
  • Paying for growth
  • Customer ownership of facilities
  • Energy cost adjustment charges
  • Net metering
  • Standby rates
  • Feed-in tariffs
  • Special contracts
  • Others

10:15 – 10:30 a.m. :: Morning Break

10:30 – 12:00 a.m. :: Time-Based Rates and Demand Management
  • Review of EPAct 2005
  • Time-of-use overview
  • Real-time pricing
  • Critical peak pricing
  • Load reduction credits
  • Other approaches
  • Smart metering
  • TOU
    • Seasonal
    • Daily
    • Hourly
    • Cost differentials
    • Variations
  • ATTACHMENT: examples of rate design 7-1 through 7-8
  • Designing time-of-use rate
    • Time periods
    • Cost differentials
    • Price elasticity
    • Changes – class load characteristics
    • Changes – revenue
    • Changes – time-related costs
    • Rate level adjustments
  • Demand management

12:00 – 1:00 p.m. :: Group Luncheon

1:00 – 2:30 p.m. :: Classroom Exercise No. 4a – Residential Rate Design

2:30 – 2:45 p.m. :: Afternoon Break

2:45 – 3:30 p.m. :: Classroom Exercise No. 4b – Commercial Rate Design

3:30 – 4:00 p.m. :: Interclass Transitions and Communicating the Plan
  • Introduction
  • Rate form transition problems
  • Promotional and special rates
  • Communicating the plan
    • Confidence in data
    • Summarize process
    • Known and measurable changes to test year
    • Do not hide facts
  • Example graphs
  • Communications summary

4:00 – 4:15 p.m. :: Course Wrap-Up


Scott H. Burnham, Executive Consultant, NewGen Strategies & Solutions LLC

Mr. Burnham has over 18 years of experience in consulting, management, cost-of service, feasibility analyses and valuation services. His responsibilities include development of revenue requirements, costs-of-service allocation methodologies, rate design and revenue adequacy studies, utility valuation analyses and other engineering economic analysis. His project feasibility, financing and system acquisition projects have provided clients with a sound financial basis upon which to make decisions on purchasing, selling or modifying facilities. His rate related projects have included those that required the development and review of retail and wholesale electric rates, and rate structures, and analysis of rate riders for interruptible industrial rates, environmental cost adjustment rates, energy / fuel cost recovery and others. He has also assisted industrial customers in rates negotiation and evaluation.

Mr. Burnham has also been involved in feasibility and implementation studies, independent engineering reviews, operation and maintenance reviews, planning studies and valuation studies for generation assets. He has led multiple projects that have focused on determining the value of distributed solar resources to specific utilities. His clients have included municipal utilities, investor-owned utilities, electric cooperatives, and private sector clients.


David A. Berg, P.E.

Mr. Berg is a Principal with Dave Berg Consulting, LLC, and has more than 29 years of experience. He specializes in consulting services requiring a combination of technical and financial expertise. His electric industry restructuring and pricing work has assisted utilities in stabilizing their customer base and revenues in an increasingly complicated environment as well as in educating them on the particular industry changes that could affect their operations most significantly. His project feasibility, financing and system acquisition projects have provided clients with a sound technical and financial basis upon which to make decisions on purchasing, selling or modifying facilities. He understands the special issues confronting small and medium size municipal utilities, as well as the joint action agencies serving these utilities. He has also assisted industrial customers in analyzing particular industry issues that impact their operations.

Mr. Berg has also been involved in financial and technical evaluation of power generation projects that utilize alternative fuels. These have included landfill gas, biomass and wind generation projects. Mr. Berg is a popular speaker both at utility training sessions and state and national conferences, due to his ability to focus on the essential points of complicated issues and to recommend actions appropriate to the audience.


Millennium Knickerbocker Hotel Chicago
163 E. Walton
Chicago, IL 60611

To reserve your room, please call 1-312-751-8100 or book online here
Please indicate that you are with the EUCI group to receive the group rate.


The room rate is $199.00 single or double plus applicable taxes.


A room block has been reserved for the nights of July 24 – 27, 2016.


Make your reservations prior to July 11, 2016. There are a limited number of rooms available at the conference rate. Please make your reservations early.


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