Effective Jan. 1, 2020, we restructured our wholesale rates to offer our owner communities greater transparency and flexibility to address critical issues in a dynamic and rapidly evolving utility environment.
We restructured our rates to achieve goals identified by Platte River and our owner communities, including the needs to:
- Improve value added by Platte River in support of owner communities
- Offer a desirable portfolio of services and rates that meet owner communities’ needs
- Better align wholesale time-of-use pricing signals with cost of service and owner community retail pricing signals
- Send pricing signals that result in system benefits
The multi-year process began in 2016 and included collaboration with rates managers in Platte River’s owner communities. The process included a comprehensive cost of service study; determination of goals and objectives of the owner communities and Platte River; the development of new rate designs; and stakeholder communications plans.
Approval by the board of directors occurred in October 2019 and the new rates became effective January 1, 2020.
By providing a more transparent rate structure, the owner communities are enabled to meet customer needs and wants through flexible service offerings that integrate diverse technologies.
No. The new rate design will be revenue neutral to Platte River.
The new rate design was initiated to provide our owner communities greater transparency concerning the costs to produce and deliver energy. By doing so, Platte River is better able to send pricing signals that result in system benefits.
The rates, charges, rules and conditions under which a utility provides service. Platte River’s tariffs, approved annually by the board of directors, detail the terms and charges for services provided.
The primary tariff charged to the owner communities by Platte River has traditionally included two seasonal charges: energy and demand
The new rate structure changes include the following:
- An owner charge to recover demand-side management program costs
- A seasonal demand charge for generation based on each month’s system peak demand or minimum charge
- A nonseasonal demand charge for transmission based on each month’s owner community noncoincident peak demand or minimum charge
- Separate energy charges for dispatchable (i.e. fossil fuels and hydro) fixed and variable costs, and intermittent (i.e. renewable wind and solar) variable costs
The owner charge is a monthly sum allocated based on each owner’s share of Platte River’s owner community kilowatt-hour sales for the six most recent year-end values. The owner charge is intended to recover fixed costs associated with demand-side management programs, including overhead costs.
The energy charges recover variable costs and a portion of fixed costs. The new energy charges are unbundled into nonseasonal fixed and variable components and unbundled further into dispatchable (i.e. fossil fuels and hydro) and intermittent (i.e. renewable wind and solar).
Demand charges recover fixed costs related to their respective functions of transmission and generation. Transmission charges are nonseasonal based on each owners’ noncoincident peak. Generation charges are seasonal based on the system coincident peak.
While Platte River does not establish retail rates, by providing a more transparent wholesale rate structure, the owner communities are enabled to meet customer needs and wants through flexible retail rate offerings.