FixedBill+
Making Rate Design Innovation Work for Consumers, Electricity Providers, and the Environment
FixedBill+
Download the Working Paper
There is growing interest in the electricity industry in the concept of a fixed bill. Akin to subscription-based pricing for services like Netflix and Amazon Prime, customers would pay a fixed monthly amount for their electricity, rather than paying for each kilowatt-hour of usage. The simplicity of the conventional fixed bill has customer appeal, but it removes the incentive for the customer to use electricity efficiently. Our paper introduces an improvement on the fixed bill concept, which we refer to as FixedBill+.”
Ryan Hledik
Principal, The Brattle Group
Comparison
Standard Volumetric Rate
conventional fixed
FixedBill+
Conservation incentive / environmental benefit
Rate design simplicity
Customer bill stability / provider revenue certainty
Customer bill savings opportunity
Provider opportunity for enhanced earnings
Load flexibility incentive
+$58.00/yr
Conventional Fixed Bill
-$37.00/yr
FixedBill
+
$95/yr average customer bill cost savings relative to Conventional Fixed Bill
Volumetric charge ($kWh)
Average annual customer bill ($/year)
Fixed charge ($/month)
$0.11/
kWh
$0.00/
kWh
$10/
mo
$125/
mo
$1,440/
yr
$1,498/
yr
$0.00/
kWh
$117/
mo
$1,403/yr
conventional fixed
Standard Volumetric Rate
FixedBill+
To enroll in FixedBill+, customers would be required to sign up for a package of load flexibility and/or energy efficiency measures. This reduces power system costs and improves environmental outcomes. Our paper provides a plausible example to show that these cost reductions allow the utility to offer a fixed bill that is actually lower than the customer’s bill under the standard rate. It’s good for the utility, the customer, and the environment.
authors
about brattle
The Brattle Group answers complex economic, regulatory, and financial questions for corporations, law firms, and governments around the world. We aim for the highest level of client service and quality in our industry.
We are distinguished by our credibility and the clarity of our insights, which arise from the stature of our experts; affiliations with leading international academics and industry specialists; and thoughtful, timely, and transparent work. Our clients value our commitment to providing clear, independent results that withstand critical review. Brattle has 500 talented professionals across North America, Europe, and Asia-Pacific.
Peter Fox-Penner
Academic Advisor
Ryan Hledik
Principal
Andy Lubershane
Sr Director of Research