IEEE Power & Energy Magazine - May/June 2020 - 81

in my view (continued from p. 84)
r-esidential -customers to a default timeof-use (TOU) rate. As another example,
Oklahoma Gas and Electric (OG&E)
offers residential and small commercial
customers a variable peak pricing (VPP)
rate, where the peak price changes daily
to better reflect real-time market conditions. As of December 2016, OG&E
enrolled approximately 19% of its residential customers in the VPP rate.

The Development of Rates and
Programs to Promote Midday
Load Building
Utility system planners and system operators in some regions are anticipating, if
not already observing, steep declines in
net system loads (i.e., gross load minus
generation from renewable resources)
during the morning and steep inclines
in late-afternoon/early-evening periods,
due to solar PV resources. This often results in wholesale power costs dropping
precipitously during midday hours and
the curtailment of renewable generators.
One strategy utilities have implemented
to address these grid management challenges employs TOU rates with very
low-priced ("super off-peak") periods
that coincide with low-cost midday
hours (sometimes referred to as matinee
pricing). California's investor-owned
utilities are currently testing whether
residential customers will increase their
usage in response to such super off-peak
prices as well as reduce or shift usage
away from higher-priced peak periods
that primarily cover late-afternoon and
early-evening hours. Utilities are also
considering programs that provide direct financial incentives for customers to increase electricity consumption
during periods with excess generation
on the system. Most notably, Arizona
Public Service (APS) filed a proposal to
implement a reverse demand-response
(DR) program to promote load building
during certain time periods to reduce
the curtailment of renewable generators.

The Increased Application of
Residential Three-Part Rates
Although three-part rates (i.e., demand charges, along with volumetric
may/june 2020

energy charges and fixed customer
charges) have traditionally been limited largely to commercial and industrial customers, utilities have become
increasingly interested in extending
demand charges into the residential
sector as well, with the stated purpose
of better aligning rate design with underlying cost causation and stabilizing
fixed-cost recovery. Within the residential sector, demand charges have
historically been offered on a voluntary
basis. For example, APS has more than
a decade of experience
with voluntary residential demand charge rates
and recently launched
a new set of tariff options, with 17% of customers opting into one
of the demand charge
rates. In contrast, other
utilities, including the
Salt River Project, have
recently implemented
or proposed mandatory residential demand charges, often targeted at customers with rooftop PVs or other DERs.

tions, one of which promotes combinations of solar and storage configurations that qualify for more favorable
grid-export prices.

The Development of Rates
Specific to Electric Vehicles
The states and utilities with some of
the highest growth and interest in supporting electric vehicle (EV) adoption
are introducing retail rates specific to
EVs. Some of these rates are designed
to encourage charging behaviors that
minimize grid impacts
or potentially benefit the
grid from such electricintensive end uses. EVspecific rates primarily
differ from one another
in terms of whether they
include demand- or timebased energy charges, a
potentially contentious
detail that may incentivize or deincentivize certain forms of EV charging (e.g., demand
charges may particularly impact public
charging by penalizing fast chargers,
which are demand intensive). Georgia
Power's rate offers EV owners a TOU
energy charge applicable to the entire
household consumption. This contrasts
with Austin Energy's residential fixed
monthly fee limiting EV charging to
off-peak hours only. San Diego Gas
and Electric's rate for EV charging
at multiunit dwellings and workplaces
includes locational costs based on
California independent system operator
day-ahead market prices and distribution feeder load.

Emerging
rate designs
generally
encourage
load building.

The Development of New
Net-Metering Alternatives
Many states have reformed existing
NEM tariffs, driven chiefly by enrollment caps, concerns about cost
shifting between NEM participants
and other ratepayers, and a desire to
incentivize customer DER investments that provide greater benefits to
the broader electric system. Of all the
alternatives to NEM, net billing has
been, by far, the most common approach-whereby customers continue to offset contemporaneous usage
with DERs but any exported energy
is compensated at some designated
grid-export rate. New York's Value of
Distributed Energy Resources tariff
represents a relatively sophisticated
form of net billing, with grid-export
rates that vary by time and location
and a phased-implementation schedule for different market segments.
Hawaii has also moved to net billing,
with a range of transitional tariff op-

Implications for
DER Deployment
Each trend entails potentially significant implications for solar and other
DERs, in terms of both the quantity
and type of deployment that may occur in the future. In considering how
these various rate reform trends may
impact DER deployment, several broad
themes emerge.
First, DER impacts depend critically
on the specifics of the tariff structure.
ieee power & energy magazine

IEEE Power & Energy Magazine - May/June 2020

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2020