Next Generation Electric Rate Design

As regulatory reform in certain jurisdictions aims to overhaul the traditional utility business model, utilities across the US are faced with major challenges in how they ensure cost recovery. In turn, traditional cost of service electric rate making is being impacted by a confluence of factors, which include:

• Continued requirements for heavy capital expenditures to modernize the grid
• Declines in electricity demand from energy efficiency and conservation
• Regulatory mandates to meet higher renewable energy targets
• Increased installation of customer-owned distributed generation

Fixed charges, decoupling mechanisms, performance based rates, and NEM reform have been some of the strategies proposed by utilities to mitigate these challenges. This webinar will explore these and other trends driving the “new normal” of electric rate design across the United States focusing specifically on how the Los Angeles Department of Water and Power (LADWP), the nation’s largest public water and power utility, took a collaborative approach to their recently approved rate case. Faced with the need for heavy capital expenditures to replace aging infrastructure, transition to a more renewable power supply, and comply with a variety of regulatory mandates, the LADWP engaged a wide group of stakeholders to develop an innovative rate structure under a newly developed Performance Based Regulation (PBR) scheme.