Rate Structures for Customers With Onsite Generation: Practice and Innovation

Recognizing that innovation and good public policy do not always proclaim themselves, Synapse Energy Economics and the Regulatory Assistance Project, under a contract with the California Energy Commission (CEC) and the National Renewable Energy Laboratory (NREL), undertook a survey of state policies on rates for partial-requirements customers with onsite distributed generation. The surveyinvestigated a dozen or so states. These varied in geography and the structures of their electric industries. By reviewing regulatory proceedings, tariffs, publications, and interviews, the researchers identified a number of approaches to standby and associated rates--many promising but some that are perhaps not--that deserve policymakers' attention if they are to promote the deployment ofcost-effective DG in their states.