AI-enabled homes promise enabling price responsive consumers. But, are consumers really ready/willing to face the stochastic spot prices?

Utility companies are natural monopolies. This is simply due to the high capital and fixed costs to build and maintain a distribution network. Let alone the physical and economical impracticality of wiring redundancy to consumers. To prevent utilities from practicing their market power on end-users, states, through public utility commissions (PUCs), tightly regulate utility tariffs, and usually control the utility rate design. Utilities though are allowed to achieve revenues given that they are justified and approved by PUCs. …


Everything about electricity rate design is on the brink of a complete remodeling

The Problem

The mounting levels of behind the meter rooftop solar generation are swiftly tousling the current utility revenue model. Prosumers (customers with rooftop solar are usually referred to as prosumers: producers+consumers) under net energy metering (you sell your excess power to utility with the same purchasing price) are simply scoring a lot of bill savings, which adds more burdens on utilities to recover their considerable fixed costs. The reduction in prosumers total consumption does not proportionally reduce the cost to serve them. …


Questioning The Regressiveness of Net Metering

Net metered restaurant customers ~ A monopolist delivery-only restaurant sells meal x with price 𝜋 per meal, which includes delivery charges. Occasionally, some customers cook their own x, and they cook even more x+, sometimes. If the restaurant agrees to buy the extra x, how much it should be? Who should pay for the delivery cost? If more people cooked x and sold it to the restaurant, at times, what will happen to the restaurant, and to people who do not cook?

· The Switcheroo 
Three main issues result from the retail rate compensation under NEM:
· Is…

Ahmed Alahmed

BS.c and MS.c in Electrical Engineering. Interested in electricity markets, optimization, math, microeconomics. https://www.ahmedsa.me

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