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Rate Design, Cost Allocation, and Rate Structure

The Brattle Group advises utilities and government agencies on the proper design of regulated rates in the electricity and natural gas industries. Our expert witnesses testify on rate structure and rate design matters before state regulatory commissions and the Federal Energy Regulatory Commission (FERC).

We prepare expert testimony and studies addressing electric retail ratemaking issues such as automatic adjustment clauses, cost allocation, marginal cost of service, economic development rates, and performance-based ratemaking. We also provide energy economic consulting on incentives for energy efficiency programs, real-time pricing, interruptible demand tariffs, and other rate mechanisms designed to encourage greater demand response to changing wholesale prices. With regard to wholesale ratemaking, we address topics such as rate design for RTO transmission access and administrative charges, allocation of costs paid to “reliability must-run” generators, and allocation of gas pipeline expansion costs on an average versus marginal/incremental basis.

Our economic experts have experience in directing rate design studies, have frequently taught rate design and related subjects through organizations such as the Electric Power Research Institute (EPRI) and the Edison Electric Institute (EEI), and have presented before a number of industry groups, including the National Association of Regulatory Utility Commissioners (NARUC).

Representative Engagements

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Related Experts

Principals:
Daniel S. Arthur
Paul R. Carpenter
Ahmad Faruqui
Philip Q Hanser
Dan Harris
A. Lawrence Kolbe
Carlos Lapuerta
Steven H. Levine
Matthew P. O'Loughlin
Johannes P. Pfeifenberger
James D. Reitzes
David Robinson
Jürgen Weiss
Joseph B. Wharton

Senior Associates:
Metin Celebi
Adam C. Schumacher

Selected Publications

Marginal Cost Analysis in Evolving Power Markets: The Foundation of Innovative Pricing, Energy Efficiency Programs, and Net Metering Rates
Rate Shock Relief
Why Are Electricity Prices Increasing? An Industry-Wide Perspective
Electric Utility Automatic Adjustment Clauses: Benefits and Design Considerations
Innovative Regulatory Models to Address Environmental Compliance Costs in the Utility Industry
California pricing experiment yields new insights on customer behavior
Dynamic Pricing and Learning in Electricity Markets
Big City Bias: The Problem with Simple Rate Comparisons
Pricing reform in developing countries
Provider of Last Resort Service Hindering Retail Market Development
Bundling Value-Added and Commodity Services in Retail Electricity Markets