Standby rates for cogenerators: expansion plan-based rate design
Utilities have traditionally based their rates on cost-of-service principles. These principles require an allocation of fixed costs among customers on a ratable basis. Cost-of-service based rates are useful in a monopoly industry, but have increasingly been modified in the context of cogeneration. The first type of modification is value-of-service rate making. This includes much of the anti-cogeneration or cogeneration deferral rate phenomenon, wherein utilities price their power at a level which the market will bear, below the level called for by cost-based systems, in order to retain customers. A second modification is occurring in the area of partial requirements service, including standby service, wherein rates may be most appropriately designed not to recover the utilities costs in any allocation system, nor based upon the market value of the electric power provided, but rather as a mechanism for sending signals to the marketplace to encourage, or discourage new retail cogeneration projects in accordance with the utility's capacity expansion plan-- expansion plan-based rate making.
- OSTI ID:
- 5427276
- Journal Information:
- Cogener. Small Power Mon.; (United States), Journal Name: Cogener. Small Power Mon.; (United States)
- Country of Publication:
- United States
- Language:
- English
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