presented by patti harper-slaboszewicz utilipoint international, inc. dr town hall meeting...

Presented by

Patti Harper-Slaboszewicz

UtiliPoint International, Inc.

DR Town Hall Meeting

Washington DC

June 3, 2008

Research Results for U.S. Regulators

2 © Copyright 2006 UtiliPoint® International, Inc.

All rights reserved. Confidential and Proprietary

Regulator support for time-based rates

Likelihood of regulator supporting residential programs

0%

10%

20%

30%

40%

50%

(blank) Not likelyat all

Not toolikely

Somewhatlikely

Likely Very likely

Time-based rates Direct LC Both

25 states reporting



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.

U.S. Regulator support for time-based rates for residential customers

0%

20%

40%

60%

80%

100%

TOU CPP CPR Hourly

2007 2004



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.



Opt-in still the preferred method today

How will residential customer participation on CPP rates be managed?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Opt-in

Opt-out

(blank)



Inclusion in Rate Base

U.S. Regulatory view towards:Include some or all AMI costs in rate base

0% 5% 10% 15% 20% 25% 30% 35%

1

2

3 - Somewhat likely

4

5 - Very likely

(blank)

80%

Regulators appear to be inclined to include the cost of AMI in the rate base.



How will regulators manage the change?Need for smart metering is clear

Time based ratesDistributed generation

How will revenue be collected from customers?

This is where I don’t envy regulatorsThe revenue has to be collected but there is no painless method for colleting the costs to support smart metering

Demand response is necessary – we can’t continue with average pricing when the cost differentials are increasing from season-to-season between high and low wholesale prices.



Increase monthly customer charge?

U.S. Regulatory view towards:Increase monthly customer charge to cover costs

of AMI

0% 5% 10% 15% 20% 25% 30%

1

2

3 - Somewhat likely

4

5 - Very likely

(blank)

68%

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



Decouple distribution revenue from total usage?

U.S. Regulatory view towards:Decoupling distribution revenue from total usage

0% 5% 10% 15% 20% 25% 30%

1

2

3 - Somewhat likely

4

5 - Very likely

(blank)

52%

Not as much enthusiasm for this option – still over 50% but only 28 percent ranked it at 4 or 5.


10

© Copyright 2006 UtiliPoint® International, Inc.All rights reserved. Confidential and Proprietary

Establish separate rate for low-income customers?

U.S. Regulatory view towards:Increase monthly customer charge to cover costs

of AMI

0% 5% 10% 15% 20% 25% 30%

1

2

3 - Somewhat likely

4

5 - Very likely

(blank)

36%

Hardly any enthusiasm for this option – perhaps regulators are worried that if the trends continue, all Americans will be low-income…


11

© Copyright 2006 UtiliPoint® International, Inc.All rights reserved. Confidential and Proprietary

Contacts and Questions

Patti Harper-Slaboszewicz(505) 797-5475 or (505) 934-6896email: [email protected]

www.amimdm.comwww.utilipoint.com

presented by patti harper-slaboszewicz utilipoint international, inc. dr town hall meeting...

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