Abstract

The structure for residential electricity rates has not changed in generations though other aspects of the energy market have evolved profoundly. People can store and generate power, and expect to sell their surplus to the local grid though they do not always appreciate how their choices affect grid stability. At the same time, regulators are confronting social issues through a variety of rate plan programs.

In recent years, computing capacity and AI increased their ability to discern usage patterns accurately. Wireless technology has become ubiquitous, with smart meters and consumers with smartphones monitoring power use. However, despite rate plan revolutions, the only innovation that has gained traction is time-of-use rates.

This Guidehouse Research report looks at how new technologies can lead to better outcomes through lower prices, new services that ensure fairer allocation of costs, higher resiliency, better service for vulnerable populations, improved revenue collections, and access to new revenue sources. While some of these involve refinements of existing popular programs and structure, others are new ideas that may surprise some stakeholders. The report’s intent is to challenge established billing methods and look at novel and potentially revolutionary options.

What Questions Does This Report Answer?

• How did current rate plans evolve?

• How does the application of AI affect rate planning?

• What can be done with usage information from home energy management systems?

• What options do utilities have for buying surplus power from the home? What is a fair price?

• What are the different customer segments and how do their needs differ?

• Will these changes help or hurt low-income and moderate-income ratepayers?

• How can utilities increase revenue and reduce collections?

• How can society reduce power disconnects for non-payment?

• What is personalized marketing performed by digital marketers? Can utilities make money from this new business model?

Who Would Benefit from This Report?

• Utilities

• Utility regulators

• AMI-based HEMS manufacturers

• AMI and advanced meter manufacturers

• Sensor-based HEMS manufacturers

• Companies specialized in software to help utilities submit rate plan changes