Faced with a surge in both distributed energy resources and electric cars, along with mounting grid constraints, utilities are ramping up dynamic pricing. We’ve seen a 10-fold increase in the number of approved rates over the last five years. But the results are mixed.
Customers are often resistant to time-varying rates, preferring the familiarity and predictability of a flat fee. The advantages of dynamic rate design — namely reducing strain on the grid, improving reliability, and facilitating the integration of renewable energy — are often not immediately clear to customers.
But with a nimble approach to rate implementation, utilities can proactively address customer concerns to ensure an easier transition to modern rates.
An “enterprise rate engine” enables utilities to engage and educate their customers about what dynamic rates mean for them. By modeling and analyzing available rate structures, utilities can show customers the cost impact of their decisions.
Increasing customer enrollment in time-of-use programs is critical for utilities to keep pace with the demands of the energy transition. Dynamic prices are vital for motivating customers to electrify, adopt DERs, and embrace demand flexibility to meet a changing power supply curve. In this Frontier Forum, we’ll examine the imperative of good rate design — and the consequences of getting it wrong. With dynamic rate design, utilities can uncover and accelerate strategies to:
- Influence customer decisions to invest in on-site solar, storage, or EVs
- Encourage customers to participate in demand response programs that smooth peaks
- Optimize the design and deployment of virtual power plants (VPPs)
- Build transparency into the rate design process
Who should watch
- Utility leaders and ratemakers
- Utility customer engagement and marketing managers
- Utility regulators and commissioners
- Clean energy advocates
- Professional and financial service providers
- Energy and utility tech consultants
- Large energy buyers
