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Presented by Patti Harper-Slaboszewicz UtiliPoint International, Inc. DR Town Hall Meeting Washington DC June 3, 2008 Research Results for U.S. Regulators.

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Presentation on theme: "Presented by Patti Harper-Slaboszewicz UtiliPoint International, Inc. DR Town Hall Meeting Washington DC June 3, 2008 Research Results for U.S. Regulators."— Presentation transcript:

1 Presented by Patti Harper-Slaboszewicz UtiliPoint International, Inc. DR Town Hall Meeting Washington DC June 3, 2008 Research Results for U.S. Regulators

2 2 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Regulator support for time-based rates

3 3 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary How does this compare to 2004? Support grew for most time-based rates except for hourly. This is most likely due to the difficulty of getting anywhere close to revenue neutrality with other rate options as hourly prices continue to increase.

4 4 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary How will residential customer participation be managed for these rates? Comments from regulators: In the initial stages customer acceptance is key, so opt-in may be preferable. The day will come where opt-out is preferable, and likely no option will be offered. It will be mandatory to be on cost sensitive rates. Comments from regulators: We would consider issues related to cost of recruitment, customer acceptance, consumer education, and whether there should be a progression from less to more complex rate designs. Time- and usage-based pricing will only work if there is neither a consumer opt-in nor an opt-out mechanism. Instead, consumers need to be migrated to a real-time pricing system on a mandatory basis for it to work.

5 5 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Opt-in still the preferred method today

6 6 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Inclusion in Rate Base Regulators appear to be inclined to include the cost of AMI in the rate base.

7 7 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary How will regulators manage the change? Need for smart metering is clear Time based rates Distributed generation How will revenue be collected from customers? This is where I dont envy regulators The revenue has to be collected but there is no painless method for colleting the costs to support smart metering Demand response is necessary – we cant continue with average pricing when the cost differentials are increasing from season-to-season between high and low wholesale prices.

8 8 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Increase monthly customer charge? Regulators appear to be look to the customer charge to cover the cost of AMI, but less so than their willingness to include in the rate base. Late 2007 U.S. regulator survey

9 9 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Decouple distribution revenue from total usage? Not as much enthusiasm for this option – still over 50% but only 28 percent ranked it at 4 or 5. Late 2007 U.S. regulator survey

10 10 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Establish separate rate for low-income customers? Hardly any enthusiasm for this option – perhaps regulators are worried that if the trends continue, all Americans will be low-income… Late 2007 U.S. regulator survey

11 11 © Copyright 2006 UtiliPoint® International, Inc. All rights reserved. Confidential and Proprietary Contacts and Questions Patti Harper-Slaboszewicz (505) or (505)


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