Transformational Electric Pricing: Advanced Seminar in Utility Rate Theory, Methods & Applications
Seminar Summary:
The FRI Advanced Seminar Transformational Pricing is a 15.25 hours seminar, occurring over three days. The seminar content focuses on the theory and application of electric pricing to address the transformation of the industry. The seminar will examine in depth the intricacies associated with the design and launch of new pricing programs. Sufficient time will be provided to allow for the analysis and presentation of realistic case studies that provide a hands-on experience. The seminar instructors are drawn from a highly talented pool of former utility executives, past regulators and commission staffers, consumer advocates, academicians, and consultants. Selection of our instructors from such a population will provide balance in the seminar’s content and allow for topic discussion from all perspectives.
Benefits:
Seminar attendees will gain intensive exposure to content through presentations, discussions, case studies, and group exercises lead by experts from a unique cross section of utility executives, former regulators and commission staffers, academicians and consultants. The program is designed to stimulate active discussion on current and forthcoming utility regulatory policy.
The seminar offers an examination and in-depth analysis of the pricing necessary to accommodate the growth of distributed resources and 2-way power transactions. The course addresses all dimensions of electricity pricing, including time, location, buying and selling. Further, the course provides deep coverage of customer engagement issues as they relate to the application of new pricing approaches: education, information, stakeholder outreach and collaboration.
Target Attendees:
Experienced regulated utility professionals, including federal and state commission personnel, public utility commissioners, consumer advocates, and private-sector managers/executives.
Seminar Sessions:
The Changing Role of the Utility, Customers & Regulators
Discusses the changes that are coming about in the provision of electric services, the evolution of new technologies that are transforming the industry, and the more active role that will be played by the customer as both a consumer and a producer of electricity. This will introduce how pricing must address value of distributed resources in the two-way power flow. It will also discuss the importance of addressing transactive energy markets in the utility planning process.
Principles of Efficient Pricing of Electricity
This is an academic lecture on the principles of efficient pricing and it’s applications to the pricing of electricity. It will provide the context for why more dynamic pricing of electricity benefits participating customers and ultimately benefits all customers, which in the case of electricity, is all of society.
Transformational Pricing Taxonomy I: Key Dimensions of Electric Pricing
Time differentiation (or dynamic pricing) will become even more critical when addressing the transformation of the industry. The design of these prices encompasses numerous dimensions that will vary depending on one’s objectives and the sophistication of the target market. Typical dimensions addressed include: number of pricing periods, timing of pricing periods, price levels, notification protocol, incentives, etc. This topic will cover the fundamentals of each of these dimensions with example applications.
Transformational Pricing Taxonomy II: Taxonomy of Dynamic & Transactive Pricing
Discussion of the range of pricing concepts along with their prevalence and effectiveness in application. Concepts include: locational pricing, hourly pricing, peak-time pricing including seasonal, daily and combinations. The discussion will also include peak time rebate programs and customized rates for specific customer segments. Examples will be provided of each using existing applications at different utilities.
A Blueprint for Offering Transformational Pricing Structures
Step-by-step guide in the design of the different pricing structures applying the concepts discussed above to derive actual prices, time periods, protocols etc. This presentation will start out with a hypothetical customer segment with standard electricity rates, unbundle the rates into functional components and then derive the new pricing structures. This will also cover data requirements and analyses. This session will include break-out groups with team exercises.
Transformational Pricing Structures: Group Applied Exercises & Discussion
This is a session where working groups are given a case study addressing an electricity pricing challenge and asked to develop a solution. Each group will be given the opportunity to present their solution and discuss among all other participants in the seminar.
Predicting Price Responsiveness from New Offerings
The importance of incorporating price responsiveness in the design process. Statistical estimation of price elasticities. Applications for pricing design. Applications for predictive financial modeling. This will be an applied academic presentation.
The Critical Role of Education
The importance of customer education has become increasingly evident over the years with the introduction of new technologies and the pricing programs that accompany them. Customers will have more opportunities to benefit from the advanced technologies, but only if they understand the new capabilities that are available to them to save on their electricity bills. This session provides lessons learned from previous and ongoing programs describing customer education programs that result in behavioral changes that benefit all customers.
Enabling Technologies Enhancing Customer Benefits
Previous applications and pilots on new pricing structures have demonstrated that enabling technologies (such as smart thermostats and other in-home devices) increase the potential for customers to respond better and achieve greater benefits. These technologies, such as smart thermostats and other in-home devices, complement the grid modernization and enhance energy efficiency. This topic will cover the experience with these enabling technologies and how best to incorporate them into an implementation of a new pricing program. The discussion will also address the utilities role with new enabling technologies.
Collaboration & Outreach with Stakeholders
The success of any new program requires collaboration with customers to develop a well-organized and implemented education and information program. This is especially true for the introduction of new pricing structures. For the pricing programs to be successful, the implementation plan must focus on understanding and anticipating the needs, priorities and expectations of customers. This topic will provide the basic principles underlying successful customer collaboration and outreach and provide examples of past programs that have been successful and not so successful.
Assuring Benefits for All Customers
New pricing programs must provide benefits for all customer segments including low income, non-English-speaking, senior citizens, special needs customers and those customers who choose not to participate in enhanced pricing and service offerings. This topic covers what has been learned from previous/existing pricing programs with regard to the effects on these customer segments and the lessons learned for future design and implementation.
Breakout Group Exercise on Customer Collaboration & Engagement; Case Discussion
Planning & Implementing Pilots
In some cases, it is useful to conduct a pilot on new concepts prior to a full-deployment implementation. This topic addresses how to design and conduct a pilot that provides the learnings needed to develop a successful full-deployment. A number of topics should be covered with regard to conducting a pilot including: (1) whether a pilot is needed; (2) elements in designing a successful pilot; (3) evaluating outcomes; (4) using pilot results for full-deployment. Also covered will be an overview of the numerous pilots that have been conducted over the past 15 years. The discussion will cover pricing pilots and other types of pilots that can be conducted on new enhanced services offered to customers. The discussion will include utility pilot examples that haven’t been successful and/or the results were inconclusive.
Registration Information:
Online registration opens February 2018
- The fees for this seminar are:
- Government & State Employees - $1575
- Private Sector - $1700
- Registrations are limited to 35 participants to ensure optimal engagement and interaction between participants and instructors.
Please contact Sarah Gott at gotts@missouri.edu or 573-882-2155 with questions regarding the program. You can also sign up here to receive updates on the seminar and imporant FRI news!