IEEE Power & Energy Magazine - May/June 2020 - 4

from the editor

Michael Henderson

utility rate making
the path between theory & implementation

H

HOW SHOULD ELECTRICity rates be designed? Many
factors must be considered
to properly balance reliability of service with the cost to
customers while also ensuring the economic viability of
utility providers. Social and
political concerns add complexity to regulatory decisions
that require consideration of
cost causation, public policies,
and grid modernization. Rate
making was difficult enough,
but now the transformational
changes in the electric power
industry further complicate matters, given
the growth of variable energy resources,
demand response, electrification, behindthe-meter resources, microgrids, and the
introduction of newer technologies. Geographic diversity and types of demand
served present other issues that affect
electricity rates. Many factors influence
the service provider's revenue requirements, including the required rate of return; depreciation schedules; operations
and maintenance costs; other accounting
factors; and financing, taxes, and subsidies. The rates provide incentives for
desired behaviors, which influence reliability and economy of service.
How can rate issues be addressed?
Data collection provides key information
for studying customer types and behaviors, system performance, and the need
for future capital investment. -Advanced

hicles. The role of markets,
operating and maintenance
costs, and capital costs further
complicates the situation.

In This Issue
This issue of IEEE Power &
Energy Magazine presents a
worldview of utility rate-making theory and implementation. The traditional two-part
rates consist of fixed and variable monthly energy charges
but require major reform to adŠISTOCKPHOTO.COM/SILVIONKA
dress the acceleration of grid
transformation and make use
of
modern
data collection and analysis
metering infrastructure (AMI) and
techniques.
The articles in this issue dis-other new technologies now provide
cuss
lessons
learned from rate-making
highly precise data, but new analytic
techniques are necessary for data inter- experience and provide an outlook for
pretation and analysis. This must be done future rate structures.
Guest Editors Ning Lu and Tao
in the backdrop of grid transformation,
the widespread addition of variable en- Hong compiled five articles that examergy resources, and greater penetrations ine the principles of rate making, the
of new technologies such as electric ve- need for rate reform, proposals for new

IEEE PES Transmission & Distribution Conference and
Exposition Postponed Until October
Following the declaration by the World Health Organization of COVID-19 as
a pandemic, local, regional, national, and international bodies have moved to
restrict travel and mass gatherings. In light of these developments and for the
protection, health, and safety of our transmission and distribution (T&D) community, the IEEE Power & Energy Society made the decision to change the T&D
Conference and Exposition to 12-15 October 2020 at McCormick Place South.
Please monitor the IEEE PES T&D website (https://www.ieeet-d.org/) for
updates on the reopening of registration and housing, exhibitor details, and

Digital Object Identifier 10.1109/MPE.2020.2972664
Date of current version: 17 April 2020

4	

ieee power & energy magazine	

conference highlights.

may/june 2020


http://www.ISTOCKPHOTO.COM/SILVIONKA https://www.ieeet-d.org/

IEEE Power & Energy Magazine - May/June 2020

Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - May/June 2020

Contents
IEEE Power & Energy Magazine - May/June 2020 - Cover1
IEEE Power & Energy Magazine - May/June 2020 - Cover2
IEEE Power & Energy Magazine - May/June 2020 - Contents
IEEE Power & Energy Magazine - May/June 2020 - 2
IEEE Power & Energy Magazine - May/June 2020 - 3
IEEE Power & Energy Magazine - May/June 2020 - 4
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IEEE Power & Energy Magazine - May/June 2020 - Cover3
IEEE Power & Energy Magazine - May/June 2020 - Cover4
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