Strategic Utility Consulting
Smart Grid and its Opportunities
for New Rate Designs
April 28, 2016
Dale Pennington
Managing Director
UtiliWorks Consulting, LLC
Strategic Utility Consulting
Utilities must prepare and embrace
disruptor technologies as they have
little control of their entrance into the
utility energy space.
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Strategic Utility Consulting
Industry Perspective
David Crane, president and CEO of NRG Energy, said
“as solar power, wind power and energy storage
grow more efficient, and as more American homes
also come to rely on cheap natural gas, energy
customers will switch from buying power to
generating their own through ‘microgrids’ – perhaps
in as little as 30 years. Microgrids will soon phase out
large centralized electrical grids.”
From US News Interview
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Strategic Utility Consulting
Energy Management Issues for the Utility
The California Public Utilities Commission (CPUC)
released a proposed decision that would redesign how
residential customers in California pay for energy. If
upheld, the decision -- supported by California investorowned utilities Southern California Edison (SCE), San
Diego Gas and Electric (SDG&E), and Pacific Gas and
Electric (PG&E) -- would direct utility companies to
reform the current tiered electricity rate structure for
residential customers and allow for greater use of timeof-use (TOU) electricity pricing.
CPUC Ruling April 2015
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Strategic Utility Consulting
What are Some of the Utilities’ Disruptive
Technologies, and How Does it Affect Pricing?

Digital Meters

Solar Energy

Energy Storage

Electric Vehicles
The disruptors typically come from
outside the industry they are affecting.
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Strategic Utility Consulting
What do “Digital Meters” do to Pricing?

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With detailed interval data, multiple alternative pricing schemas can
be provided:

Time-of-Use Pricing

Critical Peak Pricing

Real-Time Pricing

Peak Time Rebate

Green Energy Pricing

System Peak Response Transmission Tariff

Others Yet to Be Created
© 2016 UtiliWorks Consulting, LLC
Strategic Utility Consulting
How Does the Utility Manage this Pricing Change?

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The interaction between the utility and the customer must change
with a much higher level of communication and structure.

What is the best rate structure for me?

How does the utility help me to manage a rate structure?

What kind of notifications will you provide me?

How do I really know what the electricity costs?

What new tools can be provided to me if I am subject to demand charges?
© 2016 UtiliWorks Consulting, LLC
Strategic Utility Consulting
Residential Solar Power and the Utility Transformation

How are municipalities handling this?

Key Points:
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
New Equipment Charge?

Notification Requirement?

Product Standards?

Liability Arrangements?

Pricing Contract Agreements?

Application and Tools to Manage this Business?
© 2016 UtiliWorks Consulting, LLC
Strategic Utility Consulting
Home Energy Storage Planning

How does this affect my load curves?

Is it a resource for a utility?

What is my pricing points going to be?

Do I incentivize energy storage?

TOU

Rebate purchase

What benefits does the utility get from this?

How does the utility engage the customer?
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
How is it a win-win?

Are you planning for this engagement?
© 2016 UtiliWorks Consulting, LLC
Strategic Utility Consulting
Electric Vehicles Planning

How does this affect my load curves?

Is it a resource for a utility?

Is the utility discounting energy costs?

Do I extend my infrastructure to provide services?

Do I partner with someone to provide charging locations?

What payment structures can and
will I support for remote charging,
or do I participate at all?
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Strategic Utility Consulting
Water Rate Issues

Conservation and tier pricing

Cost calculations for water with multiple sources

Prepay for water and associated disconnects

Volume discounts, how does it relate to production costs?

How do I build and charge for irrigation water systems?

Will I do rebates for reducing water usage when my supply
costs dramatically increase? (PTR)
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Strategic Utility Consulting
Time for a Whole New Pricing Model?

Realignment of our business

Defining each aspect of a cost
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
Infrastructure(fixed) vs energy(variable)

Rationalize our pricing

Eliminate subsidies

Create a more fair pricing environment
© 2016 UtiliWorks Consulting, LLC
Strategic Utility Consulting
Smart Grid/Metering: Subject Matter Areas

Distribution Generation

Backhaul Design

DSM Program Implementation

Business Process Engineering

Energy Storage Implementation

Business Analysis

Field Deployment/Installation

C&I Demand Charge Management

Consulting Skills

Customer Communication

HAN Implementation

Cyber Security Implementation

Kiosk Implementation

Data Analytics

Line Loss Program Implementation

Distribution Automation

MDMS Implementation

Social Media/Public Relations

Meter Data Mapping

Systems Engineering & Integration

Meter Specification &Configuration

Transformer Load Program Implementation

OMS Implementation

Voltage Program

PHEV Program Implementation

Web-Portal Implementation

Prepay Implementation

Contract Administrator

Project Coordinator

Energy Transmission and Distribution

Project Management

AMI Hardware and Software

SCADA Systems

Solar Program
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Strategic Utility Consulting
Questions?
Thank You!
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