Meeting #41: Retail Rate Design for Default Energy Service

Tuesday, March 22, 2016
10:00am - 3:15pm
District of Columbia Public Service Commission
8th Floor – Commission Hearing Room
1325 G Street, N.W.
Washington, D.C.


Rate design 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, or energy charges) have on consumer bills and consumer decisions regarding distributed energy resources. Most of the debate seems to be unfolding with an inherent assumption that regulators can impose rate designs on utilities. But in jurisdictions that allow competition among retail energy suppliers, such as those participating in MADRI, regulators have limited authority over rate design. They cannot impose rate designs on energy suppliers, but in some cases they do approve “default” energy service rates, i.e. the rates charged to customers who have not elected to receive service from a competitive retail energy supplier.

In this meeting, we learned about the status quo of rate designs for energy service, and then heard reactions from stakeholders representing a variety of perspectives. After lunch, all attendees had the opportunity to participate in a group discussion about options for improving default energy service rate design. In the last session, we heard about a new paper on rate design produced for MADRI.


9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
Janine Migden-Ostrander, Regulatory Assistance Project (RAP)

10:15 – 11:15am

Rate Designs for Default Energy Service
John Shenot, RAP: Tarriffs for Default Energy Service
Anne McKibbin, Elevate Energy: Residential Hourly Electric Pricing in Illinois
Pete Cappers, Lawrence Berkeley National Laboratory: Issues and Insights from Analysis of Time-of-Use as a Default Rate
Leah Gibbons, NRG: Delivering Value to Consumers: Dynamic Pricing

John summarized current rate designs for default energy service in PJM jurisdictions. Anne offered an example of dynamic energy prices being offered as an option in Illinois. Pete shared his research on time-varying retail rates offered by competitive suppliers and how they are working, as a way of informing discussion about integrating distribution service rates with competitive retail energy service rate design. Leah offered insights on rate design from a competitive energy supplier's perspective.

11:15am – 12:15pm
Response Panel
Eric Matheson, PA Public Utility Commission
Susan Covino, PJM
Brian Greene, GreeneHurlocker
John Farber, DE Public Service Commission

The invited respondents offered their own reflections on the informational presentations. The goal was to present a variety of perspectives on the issues and ideas raised. All of the discussion was intended to support MADRI's interest in wholesale and retail price integration.

12:15 – 1:15 pm

1:15 – 2:30pm
Options for Default Energy Service Rate Design
Discussion led by Janine Migden-Ostrander, RAP

Everyone in attendance had an opportunity to share their thoughts and ideas about rate design for default energy service. This included exploring options, debating the pros and cons of various approaches, and identifying principles that should guide decisions about rate design.

2:30 - 3:00pm
White Paper: Designing Tariffs for Distributed Generation Customers

Janine Migden-Ostrander & John Shenot, RAP: Designing Tariffs for Distributed Generation Customers

RAP recently published a paper on rate design for DG customers. This paper is not a MADRI work product but was produced by RAP for MADRI at the request of the MADRI steering committee. Janine and John gave a brief overview of the paper.

3:00 – 3:15pm
Wrap-Up, Adjournment
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
John Shenot, Regulatory Assistance Project