skip to main content
OSTI.GOV title logo U.S. Department of Energy
Office of Scientific and Technical Information

Title: Rate Structures for Customers With Onsite Generation: Practice and Innovation

Abstract

Recognizing that innovation and good public policy do not always proclaim themselves, Synapse Energy Economics and the Regulatory Assistance Project, under a contract with the California Energy Commission (CEC) and the National Renewable Energy Laboratory (NREL), undertook a survey of state policies on rates for partial-requirements customers with onsite distributed generation. The survey investigated a dozen or so states. These varied in geography and the structures of their electric industries. By reviewing regulatory proceedings, tariffs, publications, and interviews, the researchers identified a number of approaches to standby and associated rates--many promising but some that are perhaps not--that deserve policymakers' attention if they are to promote the deployment of cost-effective DG in their states.

Authors:
; ; ;
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
875326
Report Number(s):
NREL/SR-560-39142
AAT-4-32616-04; TRN: US200603%%85
DOE Contract Number:
AC36-99-GO10337
Resource Type:
Technical Report
Resource Relation:
Related Information: Work performed by Syanapse Energy Economics, Cambridge, Massachusetts and Regulatory Assistance Project, Montpelier, Vermont
Country of Publication:
United States
Language:
English
Subject:
14 SOLAR ENERGY; 24 POWER TRANSMISSION AND DISTRIBUTION; 29 ENERGY PLANNING, POLICY AND ECONOMY; 32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION; ECONOMICS; GEOGRAPHY; NATIONAL RENEWABLE ENERGY LABORATORY; PRICES; PUBLIC POLICY; TARIFFS; DISTRIBUTED GENERATION; DG; DISTRIBUTED ENERGY RESOURCES; DER; INTERCONNECTION; PARTIAL-REQUIREMENTS CUSTOMERS; REGULATORY; NREL; Distributed Energy Resources

Citation Formats

Johnston, L., Takahashi, K., Weston, F., and Murray, C. Rate Structures for Customers With Onsite Generation: Practice and Innovation. United States: N. p., 2005. Web. doi:10.2172/875326.
Johnston, L., Takahashi, K., Weston, F., & Murray, C. Rate Structures for Customers With Onsite Generation: Practice and Innovation. United States. doi:10.2172/875326.
Johnston, L., Takahashi, K., Weston, F., and Murray, C. Thu . "Rate Structures for Customers With Onsite Generation: Practice and Innovation". United States. doi:10.2172/875326. https://www.osti.gov/servlets/purl/875326.
@article{osti_875326,
title = {Rate Structures for Customers With Onsite Generation: Practice and Innovation},
author = {Johnston, L. and Takahashi, K. and Weston, F. and Murray, C.},
abstractNote = {Recognizing that innovation and good public policy do not always proclaim themselves, Synapse Energy Economics and the Regulatory Assistance Project, under a contract with the California Energy Commission (CEC) and the National Renewable Energy Laboratory (NREL), undertook a survey of state policies on rates for partial-requirements customers with onsite distributed generation. The survey investigated a dozen or so states. These varied in geography and the structures of their electric industries. By reviewing regulatory proceedings, tariffs, publications, and interviews, the researchers identified a number of approaches to standby and associated rates--many promising but some that are perhaps not--that deserve policymakers' attention if they are to promote the deployment of cost-effective DG in their states.},
doi = {10.2172/875326},
journal = {},
number = ,
volume = ,
place = {United States},
year = {Thu Dec 01 00:00:00 EST 2005},
month = {Thu Dec 01 00:00:00 EST 2005}
}

Technical Report:

Save / Share:
  • This Task Force was established to concentrate on the testing phase of peak-load pricing, time-of-use pricing, load management, or conservation as it affects the smaller customers. These customers would require extensive control, or other devices to accomplish the desired goals. The electric industry, whether public or private, has continually sought to provide reliable electric service at reasonable prices. The economic constraints, which have largely determined the methods of providing such service, are unique to each utility. Topic 3 consists of five sub-topics: an overview of what experiments can be accomplished (particularly review European experience for U.S. applicability); evolve a seriesmore » of potential rate patterns to serve as the basis of experiments and structure a possible program; pattern a typical experiment consistent therewith; cost/benefit analysis, and consider alternatives to a purely experimental strategy. (MCW)« less
  • This guide provides general information on implementing onsite distributed generation systems in laboratory environments. Specific technology applications, general performance information, and cost data are provided to educate and encourage laboratory energy managers to consider onsite power generation or combined heat and power (CHP) systems for their facilities. After conducting an initial screening, energy managers are encouraged to conduct a detailed feasibility study with actual cost and performance data for technologies that look promising. Onsite distributed generation systems are small, modular, decentralized, grid-connected, or off-grid energy systems. These systems are located at or near the place where the energy is used.more » These systems are also known as distributed energy or distributed power systems. DG technologies are generally considered those that produce less than 20 megawatts (MW) of power. A number of technologies can be applied as effective onsite DG systems, including: (1) Diesel, natural gas, and dual-fuel reciprocating engines; (2) Combustion turbines and steam turbines; (3) Fuel cells; (4) Biomass heating; (5) Biomass combined heat and power; (6) Photovoltaics; and (7) Wind turbines. These systems can provide a number of potential benefits to an individual laboratory facility or campus, including: (1) High-quality, reliable, and potentially dispatchable power; (2) Low-cost energy and long-term utility cost assurance, especially where electricity and/or fuel costs are high; (3) Significantly reduced greenhouse gas (GHG) emissions. Typical CHP plants reduce onsite GHG by 40 to 60 percent; (4) Peak demand shaving where demand costs are high; (5) CHP where thermal energy can be used in addition to electricity; (6) The ability to meet standby power needs, especially where utility-supplied power is interrupted frequently or for long periods and where standby power is required for safety or emergencies; and (7) Use for standalone or off-grid systems where extending the grid is too expensive or impractical. Because they are installed close to the load, DG systems avoid some of the disadvantages of large, central power plants, such as transmission and distribution losses over long electric lines.« less
  • This report describes the results of attitude and opinion surveys conducted among 15 experimental customer groups within five utility services areas participating in FEA-sponsored load-management experiments. A total of 332 residential, commercial, and industrial customers were interviewed in person. The questioning used to secure the attitude and opinion information was virtually identical to that administered to ''representative U.S.'' samples of customers interviewed in May-June 1976. A report of those surveys was published by the Electric Utility Rate Design Study, January 3, 1977. The surveys among experimental customer groups were conducted to secure information that could be used to compare themore » attitudes of those participating in the experiments with those not participating (the representative U.S. samples) and, also, to make comparisons among the various time-of-day, seasonal rates, air-conditioning control, and industrial load-shifting experiments studied.« less
  • This report describes the results of an attitude and opinion survey. Lengthy, personal interviews were conducted in all four U.S. regions during May--June 1976 among representative samples of 415 residential, 205 commercial, and 195 industrial customers of electric utilities. The purpose of the study was to secure information that would be of value to both regulatory and operating segments of the utility industry in developing rate-design and load-management plans and programs. The attitude and opinion information obtained about a number of basic ''energy issues'' suggests a need to inform customers about: (1) the availability of electricity now and in themore » foreseeable future and why demand will increase; (2) whether utilities should be required or allowed to provide electricity ''anytime'' for those willing to pay; (3) the rationales for: time-differentiated pricing and voluntary versus mandatory load-management practices; and (4) whether, and to what extent, production costs vary by time, by customer class, or by amount of usage; related to this is the need to explain why rates should follow costs and what costs are relevant.« less
  • Net metering has become a widespread policy in the U.S. for supporting distributed photovoltaics (PV) adoption. Though specific design details vary, net metering allows customers with PV to reduce their electric bills by offsetting their consumption with PV generation, independent of the timing of the generation relative to consumption - in effect, compensating the PV generation at retail electricity rates (Rose et al. 2009). While net metering has played an important role in jump-starting the residential PV market in the U.S., challenges to net metering policies have emerged in a number of states and contexts, and alternative compensation methods aremore » under consideration. Moreover, one inherent feature of net metering is that the value of the utility bill savings it provides to customers with PV depends heavily on the structure of the underlying retail electricity rate, as well as on the characteristics of the customer and PV system. Consequently, the value of net metering - and the impact of moving to alternative compensation mechanisms - can vary substantially from one customer to the next. For these reasons, it is important for policymakers and others that seek to support the development of distributed PV to understand both how the bill savings varies under net metering, and how the bill savings under net metering compares to other possible compensation mechanisms. To advance this understanding, we analyze the bill savings from PV for residential customers of California's two largest electric utilities, Pacific Gas and Electric (PG&E) and Southern California Edison (SCE). The analysis is based on hourly load data from a sample of 215 residential customers located in the service territories of the two utilities, matched with simulated hourly PV production for the same time period based on data from the nearest of 73 weather stations in the state.« less