Survey of International Standby Tariffs

RPB Energy Economics with Econolytics submitted a report on an international standby tariffs survey to PTIT for the Office of Energy Regulatory Commission last month.  The purpose of our study is to review and evaluate standby tariff designs from several different jurisdictions to better understand the range of potential rate designs possible for use in Thailand. They examined standby tariffs of eight jurisdictions in four countries. The selected eight jurisdictions include Citipower, Australia, British Columbia Hydro and Power Authority (BC Hydro), Canada, Tenaga Nasional Berhad (TNB), Malaysia, Entergy Arkansas Inc. (Entergy), Arkansas, Pacific Gas & Electric (PG&E) in California, Public Services Company of Colorado (PSCOL) in Colorado, Jersey Central Power & Light Company (JCPL) in New Jersey, and Consolidated Edison Company (ConEd) in New York.

Standby rates are not new. Utilities have been implementing their standby tariffs for decades. Their rates were designed for partial requirement customers who do not obtain all of their energy via their host utility. A Standby service customer normally produces energy primarily to serve some share of their own load and sales obligations. But when its on-site generation only produce partial or no output to cover its needs, they withdraw power from their host utility’s transmission or/and distribution grid with little or no notice to the utilities. Historically, most of these customers have been industrial customers with combined-heat and power (CHP) generation. However, in recent years the trend is changing as customers have increasingly installed non-CHP generation, such as rooftop solar photovoltaics (rooftop solar). This is also true in Thailand. While renewable generation resources like rooftop solar have many features in common with traditional partial requirements customers, there are also some key distinctions that deserve further study. For example, the intermittent nature of generation may require costly additional resources to integrate, such as fast ramping generators or demand response. Many utilities have undertaken Value of Solar studies to better understand the costs and benefits of rooftop solar for the grid as a whole.

Their survey examined various types of standby services ranging from maintenance outages, forced outages (backup power), supplemental power.  and economic replacement power.  To assist in designing the rates, they created a standby rate model that incorporates ratemaking best practices and principles.