§ 39-26.6-24. Rate design review by the commission. (a) On or after July 1, 2015, the commission shall open a docket to consider rate design and distribution cost allocation among rate classes in light of net metering and the changing distribution system that is expected to include more distributed-energy resources, including, but not limited to, distributed generation. The commission will determine the appropriate cost responsibility and contributions to the operation, maintenance, and investment in the distribution system that is relied upon by all customers, including, without limitation, non net-metered and net-metered customers. In that docket, the commission shall require the electric-distribution company to file a revenue-neutral allocated cost of service study for all rate classes and a proposal for new rates for all customers in each rate class. The electric-distribution company shall use the distribution revenue requirement upon which the then-current distribution rates were set. The electric-distribution company may use the allocated cost of service that was filed with the compliance filing from the rate case when the then-current distribution rates were set. The commission may also address the rate design for the equitable recovery of costs associated with energy efficiency and any renewable-energy programs that are recovered in rates.

(b) In establishing any new rates the commission may deem appropriate, the commission shall take into account and balance the following factors:

(1) The benefits of distributed-energy resources;

(2) The distribution services being provided to net-metered customers when the distributed generation is not producing electricity;

(3) Simplicity, understandability, and transparency of rates to all customers, including non-net metered and net-metered customers;

(4) Equitable ratemaking principles regarding the allocation of the costs of the distribution system;

(5) Cost causation principles;

(6) The general assembly's legislative purposes in creating the distributed-generation growth program; and

(7) Any other factors the commission deems relevant and appropriate in establishing a fair rate structure. The rates shall be designed for each proposed rate class in accordance with industry-standard, cost-allocation principles. The commission may consider any reasonable rate design options, including without limitation, fixed charges, minimum-monthly charges, demand charges, volumetric charges, or any combination thereof, with the purpose of assuring recovery of costs fairly across all rate classes.

(c) The commission shall issue an order in the docket by no later than March 1, 2016. Any new rates shall take effect for usage on and after April 1, 2016; provided, however, that the electric-distribution company may seek an extension if necessary to make the billing system changes necessary to implement a new rate structure. After new, revenue-neutral rates are set in the docket specified above, the commission may approve changes to the rate design in any future distribution-base rate cases when a fully allocated embedded cost of service study is being reviewed in the rate case, subject to the principles set forth in subsection (b) of this section.

History of Section. (P.L. 2014, ch. 200, § 1; P.L. 2014, ch. 216, § 1; P.L. 2015, ch. 59, § 1; P.L. 2015, ch. 62, § 1.)