EEI's Phil Moeller: Maximizing the Grid for Everyone
There is no one-size-fits-all solution for rate design, and an array of options and regulatory and policy tools should be considered in rate discussions happening across the country.
Expanding and upgrading America’s critical energy infrastructure—while ensuring reliability and affordability for customers—has never been more important for our industry. That’s why I was so encouraged to see the warm reception to the findings of a new Critical Consumer Issues Forum (CCIF) report during July’s National Association of Regulatory Utility Commissioners (NARUC) Summer Policy Summit in West Palm Beach, Fla.
The report, Exploring Rate Design and Other Regulatory Tools: Maximizing Grid Benefits and the Customer Experience, builds on a consensus principle that CCIF participants identified in 2023: More focus should go into developing cost-based rate design structures that can help mitigate upward pressure on customer bills while maximizing the value of grid assets. The report is the result of months of CCIF engagement with electric companies, state regulatory commissions, andcustomer advocate groups, who worked together to develop a thoughtful framework for exploring efficient rate design and customer pricing options amid a complicated regulatory landscape.
As a member of CCIF’s executive committee, I am proud of the constructive dialogues and diverse group of stakeholders that contributed to the report, which will help all of us build a solid foundation for positive regulatory outcomes. During an EEI-sponsored breakfast and subsequent panel discussions at NARUC’s fourday summer policy summit, weshared the findings of the report, including ten consensus principles that we hope will guide discussion around costbased rate design moving forward.
Some of these principles, such as developing a sense of urgency around using innovative rate design tools to address issues around affordability and long-term costs for electric companies, are more technical in nature, dealing with the very foundations of rate design. Others, such as strategically promoting and rewarding customer behavior changes as they relate to energy use, focus on community and customer engagement efforts, ensuring that customers understand and can benefit from innovative rate solutions.
These principles should be considered less of a step-by-step roadmap and more of an establishment of common ground shared by electric companies, state commissions, customer advocates, and other relevant stakeholders. There is no one-size-fits-all solution for rate design, and an array of options and regulatory and policy tools should be considered in rate discussions happening across the country.
Our industry is governed by the laws of physics. Balancing energy supply and demand, transferring energy throughout our service areas to balance peaks and fill troughs, is at the heart of our industry. Innovative rate design structures can help ensure affordability for customers while allowing America’s investor-owned electric companies to make the most of the grid of today while proactively building and preparing for the grid of tomorrow.
There are no shortage of challenges for electric companies and state regulators. Once-in-a-generation demand growth is reshaping near- and long-term grid planning, and increasing threats from wildfires and extreme weather events threaten our nation’s critical energy infrastructure.
We should think about innovative and forward-thinking rate design structures in the same way that we think about the technologies in these command centers—as indispensable tools that help us serve our customers reliably and affordably.
When rate design complements demand-response initiatives, distributed energy resources, and energy efficiency programs that make the most of the infrastructure that we currently have in place, we all benefit.
The road to a resilient clean energy future is not one that we can walk alone, and the latest CCIF report is a testament to the progress that can be achieved by working together with an array of relevant stakeholders. By engaging early with regulators and customer-advocate groups—and ensuring customers can be actively informed and engaged in their energy usage—we can address the challenges and benefit from the opportunities that lay before us, together.
