A successful transition to a 21st Century Electricity System requires consideration of a range of issues that will ultimately redefine the regulatory framework and utility business model while creating new opportunities for third-party providers and customers to contribute to the operation of the electricity system. In this fourth in an occasional series published by Utility Dive, AEE looks at the issue of rate design in a changing electric power system .
The U.S. electricity system is changing, driven by technological innovation, increased use of distributed energy resources (DER), and evolving customer needs and preferences. If DER assets are properly integrated into the system, they have the potential to make the grid more efficient, flexible, resilient, reliable, and clean, while simultaneously giving customers greater choices and control over energy use and costs. For this to happen, new rate designs will be needed – and some approaches to new rate design fulfill the promise of a DER future better than others.