Residential Demand Charges

Overview

Demand charges for commercial and industrial customers have been around a long time in the electric industry. However, they have been rare for residential customers. The primary reason is that in the past, residential electricity loads have been viewed as fairly similar from one customer to the next without much variance. Conditions have changed dramatically in recent years, though, as consumer consumption patterns shift in concert with emerging technologies such as smart thermostats, plug-in electric vehicles, rooftop solar, energy storage, and multiple electronic devices. These changes have contributed to declining utility sales growth, even though the cost of maintaining a reliable grid continues to increase. This dilemma has led to a growing number of utilities proposing residential demand rate structures as one means of assuring stable revenue.

The interest among utilities to consider demand charge rate structures as an alternative to imposing fixed residential charges has been stimulated by a couple of drivers:

They help utilities protect revenue. Demand charges provide utilities with a way to make sure that customers pay their fair share for the burden they place on the electric grid.
They respond to a new reality where distributed solar, smart meters and efficiency measures give customers more control over their energy use. The arrival of smart meters allows customer demand at times of system and distribution peak to be accurately recorded.

This conference will bring together thought-leaders among utilities, industry experts and solution providers who will take a deep dive into the issues, pain points and resolutions around residential demand charges. It will also provide important baseline information for utility staff to develop their own approach to evaluating whether this rate design option makes sense in their regulatory framework and service territory.

Learning Outcomes

Summarize the industry experience with residential demand charges
Discuss the benefits and challenges of offering a residential demand charge
Discuss issues that utilities can expect to encounter with residential demand charges
Explain how three-part rates will encourage better use of grid capacity
Assess how to discuss the implementation of multi-part pricing to intervening parties and regulators
Explore the relationship between demand rates and net energy metering (NEM)
Examine the impact that imposing a residential demand charge has on various stakeholders
Interpret and evaluate customer response to demand charges
Discuss the potential unintended consequences of demand charges
Evaluate different utilities’ offering of a demand rate to their residential customer base

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 0.9 CEUs for this event.

Requirements for Successful Completion of Program

Participants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

Instructional Methods

Case Studies, Panel Discussions and PowerPoint presentations will be used in the program.

Agenda

Thursday, October 20, 2016

7:45 – 8:15 a.m. :: Registration and Coffee Service

8:15 – 8:30 a.m. :: Introductions and Overview

8:30 – 8:45 a.m. :: Welcome Address from Commonwealth Edison

Fidel Marquez, SVP, Government & External Affairs, ComEd

UTILITY PERSPECTIVES ON DEMAND CHARGES

8:45 – 9:30 a.m. :: Keynote Address: The Future of Rate Design for Residential Customers

In this keynote address, renowned energy economist Ahmad Faruqui will discuss the reasons why many utilities are opting to make three-part rates the standard offering for all residential customers. The presentation will examine how moving to three-part rates can encourage better use of grid capacity, minimize cross-subsidies between customers, and foster adoption of advanced technologies.

Ahmad Faruqui, Principal, the Brattle Group

9:30 – 10:15 a.m. :: Demand Charges: A Former Commissioner’s Observations

When it comes to the hotly-debated topic of demand charges, serious consideration is warranted by regulatory policy-makers facing this decision. The session will provide insights from a regulatory perspective on this rate design structure that many utilities are adopting or considering adopting.

Doug Scott, Vice President – Strategic Initiatives, Great Plains Institute (Former Chair, Illinois Commerce Commission)

10:15 – 10:30 a.m. :: Morning Break

10:30 – 11:15 a.m. :: Understanding Residential Demand Charges: Present and Future

This segment will explore the case for residential demand charges when it comes to addressing the infrastructure cost recovery. It will also review the experience with residential demand charges in the U.S. and discuss alternative formulations for demand charges and merits of each option. In addition, it will review various stakeholder concerns and make recommendations on specific initiatives that will help advance the debate on residential demand charges, while addressing the concerns of stakeholders.

Sanem Sergici, Principal, The Brattle Group

11:15 a.m. – 12:00 p.m. :: The Correlation between Demand Rates and Net Energy Metering

In utility rate structure paradigms, important correlations exist between net energy metering and residential demand charges. In this session, Paul Hibbard (former Massachusetts DPU Chair) will explore the connections and why they’re important, as they relate to:

The original intent of NEM
Addressing NEM cross-subsidies between different customer classes
Should net-metering customers be under a separate rate
Time differentiated charges for solar customers

Todd Schatzki, Vice President, Analysis Group, Inc.

12:00 – 1:00 p.m. :: Group Luncheon

1:00 – 1:45 p.m. :: Residential Demand Charges & Net Energy Metering: Where is Action Being Taken?

Residential demand charges – particularly for solar customers – are receiving more attention from utilities and regulators. This session will discuss where residential demand charges, as well as fixed charge increases and net metering changes, have been proposed recently, provide detail on some key demand charge proposals, and discuss the interaction between net metering and demand charges.

Brian Lips, DSIRE Project Manager/ North Carolina Clean Energy Technology Center

1:45 – 2:30 p.m. :: Next Generation Energy Plan: Rate Design Proposal and Impact on Residential Customers

In this session, Scott Vogt will provide a description of Commonwealth Edison’s (ComEd) Next Generation Energy Plan. Mr. Vogt will describe the
current design in place for their customers, discuss ComEd’s proposed rate design proposal and provide an analysis of how different customers
would be impacted with no changes in their behavior. Furthermore, ComEd’s solar rebate program and its impacts on solar customers will also be discussed.

Scott Vogt, Vice President – Energy Acquisition, Commonwealth Edison (ComEd)

2:30 – 3:15 p.m. :: A Case Study on Residential Demand Charges: UNS Electric (Arizona)

In 2015, UNS Electric in Arizona filed a rate case that included residential demand charge proposals. Dan Hansen will describe the various twists and turns that took place over the course of the proceedings. He will describe the positions of the key stakeholders and how those positions changed over time. It is both an interesting story on its own and reveals some of the issues that utilities can expect to encounter if they propose residential demand charges.

Daniel G. Hansen, Vice President, Christensen Associates Energy Consulting

3:15 – 3:30 p.m. Networking Break

3:30 – 4:15 p.m. :: Developing Multi-Part Time-Differentiated Pricing including Demand Charges

This session will illustrate the development of multi-part (including demand charges), time-differentiated pricing for residential and small commercial customers as implemented by Duke Energy. It will also explore possible improvements in matching individual customer revenues to the cost of serving these customers afforded by such designs. Emphasis will be placed on explaining the designs to intervening parties and regulators.

Jeff Bailey, Director – Pricing and Analysis, Duke Energy

4:15 – 5:15 p.m. :: Panel Discussion: Are Residential Demand Charges the Answer?

This group of industry experts will bring to bear their years of experience in utility rate design to weigh the opportunities and constraints associated with pursuing the concept of a residential demand charge. The panelists will discuss why demand charges may make perfect sense for some utilities but not for others.

Moderator: Ahmad Faruqui, Principal, the Brattle Group

Panelists:

Doug Scott, Vice President – Strategic Initiatives, Great Plains Institute (Former Chair, Illinois Commerce Commission)

Paul Hibbard, Vice President, Analysis Group (Former Chair, Massachusetts Dept. Public Utilities)

Jeff Bailey, Director – Pricing and Analysis, Duke Energy

Bill Brayden, President, Brayden Automation

Leland R. Snook, Director – Rates & Rate Strategy, Arizona Public Service, (APS)

Friday, October 21, 2016

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

CONSUMER PERSPECTIVES ON DEMAND CHARGES

8:30 – 9:15 a.m. :: How APS’s Customers have Responded to Demand Charges for 30+ Years

Residential time-of-use demand rates have been an effective tool in encouraging APS customers to reduce their peak demand during the on-peak period for many years. The utility industry continues to evolve and demand rates have become an increasingly important means of stimulating innovation and helping customers conserve energy. Grid modernization requires a modern approach to pricing – APS’s customer experience dispels the myths surrounding residential rate reform.

Leland R. Snook, Director – Rates & Rate Strategy, Arizona Public Service, (APS)

9:15 – 10:00 a.m. :: Charge Without a Cause

Drawing from the recent paper of the same name, this presentation will unpack key elements of demand charges and explore their effect on fairness, efficiency, customer acceptability and the certainty of utility cost recovery. The paper found that most applications of demand charges for small customers perform poorly in all categories.

The presentation will also analyze the demand charge proposal introduced in Illinois as part of SB1585 and the reaction to the proposal among advocates and lawmakers.

Abe Scarr, Director, Illinois Public Interest Research Group (PIRG)

10:00 – 10:30 a.m. :: Networking Break

10:30 – 11:15 a.m. :: Consumer Pulse and Segmentation Study

The Smart Grid Consumer Collaborative’s (SGCC) research has shown that consumer engagement is a key driver for the success of energy efficiency, demand response and other programs offered by many utilities. Yet, many utilities struggle with effectively engaging consumers. The key to effective engagement lies in understanding consumers’ attitudes and motivations, and in understanding that consumers are not monolithic. This presentation will cover what is known about consumer attitudes based on interviews with more than 7,000 U.S. residential consumers, along with factors that motivate consumer engagement.

What do consumers know and what do they care about?
Where consumer engagement matters
Who is out there? Introducing SGCC segments (based on SGCC Consumer Pulse studies)
Tying it all together with segmentation
Protecting low income and senior citizens

Patty Durand, President & CEO, Smart Grid Consumer Collaborative (SGCC)

11:15 a.m. – 12:15 p.m. :: Customer Perspectives on Demand Charges

There’s been a great deal of discussion lately about residential demand rates, as utilities grapple with finding a solution to fixed cost recovery for DER’s. While the DER piece is new, residential demand rates are not. Since the early 1970’s, about 30 electric utilities in the US (out of an approximate 3200) have now, or have had in the past, residential demand rates. There are multiple examples of past and existing residential demand rates that are attractive to residential customers and some that are not. In this session, Bill Brayden, an expert on residential demand control, will share his “Top 10” List of things that he has learned working with residential customers for the last 38 years helping them control their peak demands. These examples are from the customer’s perspective about what makes a good demand rate. He will also give a very quick view of where he thinks demand rates and demand control are going now that AMI (advanced meter infrastructure) deployments have been implemented in many utilities.

Bill Brayden, President, Brayden Automation

12:15 p.m. :: Conference Adjourns

Speakers

Jeff Bailey, Director of Pricing and Analysis , Duke Energy

Bill Brayden, President, Brayden Automation/Energy Sentry

Patty Durand, President & CEO, Smart Energy Consumer Collaborative

Ahmad Faruqui, Principal, The Brattle Group

Dan Hansen, Vice President, Christensen Associates Energy Consulting, LLC

Paul Hibbard, Principal, Analysis Group

Brian Lips, Senior Project Manager - Policy and DSIRE Program Manager, NC Clean Energy Technology Center

Fidel Marquez, Senior VP, Government & External Affairs, ComEd

Abe Scarr, Director, Illinois Public Interest Research Group, Illinois PIRG

Todd Schatzki, Principal, Analysis Group, Inc.

Doug Scott, Vice President, Strategic Initiatives , Great Plains Institute

Sanem Sergici, Principal, The Brattle Group

Scott Vogt, Vice President - Energy Acquisition, ComEd

Location

Marriott O’Hare
8535 W Higgins Rd
Chicago, IL 60631

To reserve your room, please call 1-773-693-4444
Please indicate that you are with the EUCI group to receive the group rate.

Room Rate:

The room rate is $219.00 single or double plus applicable taxes.

Room Block Dates:

A room block has been reserved for the nights of October 19, 2016.

Rate Available Until:

Make your reservations prior to September 20, 2016. There are a limited number of rooms available at the conference rate. Please make your reservations early.

Register

Host Utility

Sponsor