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Utility Dive: Rate design for a DER future

Posted by Advanced Energy Economy on Feb 12, 2018

Rate design for a DER future: Designing rates to better integrate and value distributed energy resources

In this third installment from AEE on how the power sector can successfully transition to a 21st Century Electricity System, AEE's Coley Girouard digs in on rate design challenges for a DER future, noting time-varying rates may be the best bet to accurately price DERs.

The U.S. electricity system is changing, driven by technological innovation, increased use of distributed energy resources (DER), and evolving customer needs and preferences. If DER assets are properly integrated into the system, they have the potential to make the grid more efficient, flexible, resilient, reliable, and clean, while simultaneously giving customers greater choices and control over energy use and costs. For this to happen, new rate designs will be needed – and some approaches to new rate design fulfill the promise of a DER future better than others.  

In the fast-changing electric power system going forward, rate designs will need to achieve multiple objectives. They will need to allocate costs equitably. They will need to compensate DER customers for the benefits DER provides and properly charge them for use of the grid.

And they will need to allow utilities to fairly recover the revenue required to maintain a system that provides safe, reliable, universal electricity service. But with customers more actively engaged with the electric power system, rate designs need to do even more. They need to send appropriate price signals so that customers are motivated to act in ways that benefit themselves and the grid as a whole....

See the full Utility Dive piece here. 

Topics: AEE In The News