The industry of utility companies is changing. Traditional utilities have lost profits and consumers as a result of renewable portfolio mandates, net energy, behind-the-meter storage, and other distributed generation alternatives. Although there is no solution, power rate structures must be altered to facilitate a smooth transition.
In the past, all electricity supplies were combined into a single volumetric fee. Customers may be encouraged to reduce their dependence on conventional utilities in the long term by policy and technological trends. Utilities will lose customers unless their prices and offers are updated.
Volumetric pricing caused a mismatch between power rates and utility expenses. As a greater proportion of electricity is generated by renewables, utilities must maintain adequate operational flexibility. Customers are perplexed as to why their costs are increasing considering minor changes in consumption and service level.
All the main stakeholders’ objectives were met by paying customers per kilowatt-hour of using it. …