The Public Utilities Commission has launched a proceeding to address an investigation of rate design as required by legislation enacted in 2014 (H.B. 7727). Pursuant to the statute, this proceeding will “consider rate design and distribution cost allocation among rate classes in light of net metering and the changing distribution system that is expected to include more distributed-energy resources, including, but not limited to, distributed generation.”
The statute requires the PUC to consider several factors in devising any new rates, which must be revenue-neutral and based on the utility’s most recent COS study. The PUC may consider “any reasonable rate design options, including without limitation, fixed charges, minimum-monthly charges, demand charges, volumetric charges, or any combination thereof, with the purpose of assuring recovery of costs fairly across all rate classes.”
National Grid has filed an executive summary of its proposed rate design. The summary indicates that National Grid’s rate-design proposals will reflect a shift from recovering distribution system costs through variable (per-kWh) charges to charges that reflect customer size. As part of its proposal, National Grid plans to implement a four-tiered customer charge for residential and small commercial customers.