Electric Utility Pricing - Trends in Cost Recovery
July 14-15, 2021 | Online :: Central Time
“Very helpful class to a new rate designer! Important to understand as our industry is facing very challenging times.” Rate Specialist, Alabama Power Company
“Excellent overview of how rates are designed and the many political and economic factors that go into them.” Budget & Rates Analyst, Great River Energy
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.
Learning Outcomes
- Discuss pricing interface and implications of risk
- Examine how to develop cost curves
- Review classroom exercises on developing cost curves, solar installation, and designing bundled rates
- List ratemaking guidelines
- Identify special rate provisions
Recommended Background And Requirements
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.
Wednesday, July 14, 2021 – Central Time
8:45 – 9:00 a.m.
Log In & Welcome
12:00 – 12:30 p.m.
Lunch Break
9:00 a.m. – 4:00 p.m.
Course Timing
Short breaks will be taken throughout the course
Course Overview and Introduction
- Introduction
- Building on cost of service
- Overlap
- Background and requirements
- Instructors
- The process
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
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
Morning Break
Electric Utility Pricing: Trends That Matter (Continued)
- Storage
- Solar rate considerations/value of solar
- Classroom exercise No. 1: special rate design – solar installation
Lunch Break
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
Afternoon Break
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
Unbundled Rate Design
- Unbundled rate overview
- Traditional bundled vs. unbundled
- Unbundling strategies
Thursday, July 15, 2021 – Central Time
8:45 – 9:00 a.m.
Log In
12:00 – 12:30 p.m.
Lunch Break
9:00 a.m. – 4:00 p.m.
Course Timing
Short breaks will be taken throughout the course
Marginal Cost Pricing
- Resources
- Application and use
- Short run and long run
- Marginal capacity costs
- Production cost modeling
- Marginal energy costs
- Marginal transmission costs
- Revenue reconciliation
- Dilemma of reconciliation
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
- Time‐of‐use
- Seasonal
- Daily/hourly
- Cost differentials
- Variations
- ATTACHMENT: Examples of rate design 8‐1 through 8‐6
- 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
Morning Break
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
Lunch Break
Classroom Exercise No. 4a – Residential Rate Design
Afternoon Break
Classroom Exercise No. 4b – Commercial Rate Design
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
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., Principal, Dave Berg Consulting, LLC
Mr. Berg is a Principal with Dave Berg Consulting, LLC, and has more than 32 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.
We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.
- IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
- You will receive a meeting invitation will include a link to join the meeting.
- Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
- You will need to join the appropriate meeting at the appropriate time.
- If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
- The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.
More than 5 attendees? Call our office at 303-770-8800 for additional discounts.
Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ
If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event
| Event | Standard Rate | Attendees | |
|---|---|---|---|
| Single Connection - Electric Utility Pricing - Trends in Cost Recovery | US $ 1295.00 | ||
| Pack of 5 connections | US $ 5,180.00 | ||
| Call us at 303.770.8800 if you have any specific questions on the volume discounts | |||
| * all other discounts do not apply to license packs | |||
This event has the following related events: | |||
| Electric Cost-of-Service - Essential Concepts for a Changing Industry | US $ 1295.00 | ||
| Pack of 5 connections | US $ 5,180.00 | ||
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- Attend the Course and Electric Cost-of-Service - Essential Concepts for a Changing Industry and pay US $ 2,295.00 per attendee (save US $ 295.00 each)
Cancellation Policy
Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before June 11, 2021 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800
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