In the world of electric and natural gas rate design, the tariffs of the past and today will not work in the future. In a presentation entitled, The Rates…They Are A Changin’, Apogee Interactive‘s Joel Gilbert P.E. and The Brattle Group’s Ahmad Faruqui, Ph.D. Economics, explain how the old ways of designing rates are clashing with customer expectations.
Customers Drive Change
The presenters list these as characteristics of current tariffs:
- Flat volumetric rates with low fixed charges
- Inclining or declining block rates with low fixed charges
- Seasonal rates with low fixed charges
Dr. Faruqui expressed that the driving catalyst for rate transformation is the customer. … “It is not the regulator, it is not the utility, it is the customers themselves.” He added, “Yesterday’s customer is today’s prosumer and tomorrow’s prosumager.” (prosumager: electric consumers who own generators, storage batteries, and at times may also sell electricity to the grid.)
Ahmad also presented the five “Immortal” objections which have delayed tariff modernization such as customers having little time or interest in becoming a home energy manager.
Joel Gilbert expressed his thoughts on consumer energy management. “Most consumers don’t know how to calculate weather normalization on their bills. If the bill happens to be higher than expected, they often just react emotionally. They don’t think something might be different in the home.”
As the presentation concluded, Dr. Faruqui recommended a nine-step process for overcoming tariff objections which includes computing bill changes and understanding which customers will see adverse bill impact.
Utilities are beginning to offer customers more rate choices. Are you ready to turn challenges into opportunities to engage and educate customers about rate changes? Learn from industry leaders and listen to this insightful presentation, “The Rates They are a Changin…” presented March 25, 2021.
Apogee Interactive is a privately held, woman-owned business and one of the nation’s leading full-service provider of proactive customer engagement SaaS provider for energy utilities. As the Hometown Connections partner for customer engagement, Apogee’s digital engagement platform delivers proactive, targeted, relevant, and personalized communication for hundreds of North American utilities, including some of the largest and most progressive, such as Southern Company, ConEd, LADWP, and Jackson EMC. For more information, visit www.apogee.net or on LinkedIn. Or contact Karen Morris at firstname.lastname@example.org.