ORIGINAL REPORTING: How To Plan For New Energy
The solar toolbox: How utilities can find the best planning approach for distributed solar; Studying the locational benefits of distributed solar is one way to plan, an LBNL study says
Herman K. Trabish, September 29, 2016 (Utility Dive)
Editor’s note: Utility and system planning continues to be the next frontier for New Energy to conquer.
To cover a utility's fixed costs, are demand charges or time-of-use (TOU) rates superior? APS Director for State Regulation and Compliance Greg Bernosky thinks a demand charge is the best way to manage the utility’s peak demand and its costs. A price signal that gets customers to scale back their energy use during the utility’s peak demand period between 3 p.m. to 8 p.m. on weekdays reduces the disproportionately big spending on infrastructure and fuel costs necessary to meet demand in those few hours, , according to Bernosky. Other rate design experts say there are many questions yet to be answered about demand charges, and one is whether time-of-use rates are superior to reduce peak demand and fit consumer needs.
Rick Gilliam, distributed generation program director at Vote Solar, said the utility can more effectively address cost recovery with price signals customers can understand and act on through a range of rates. One example is the last year’s Colorado proceeding that was settled when Xcel Energy and renewables advocates agreed to both a demand charge pilot and a TOU rate trial. Another is this year’s agreement between APS and distributed energy resources advocates that included four alternative demand charges and a TOU rate. Both demand charges and TOU rates aim to use price signals to reduce consumer usage and shift it to off-peak hours, noted a recent report from Rocky Mountain Institute. When applied successfully, either rate structure can reduce peak load enough to allow utilities to defer or cancel costly investments in grid infrastructure… click here for more