CEO Column: We are developing more pricing options to meet our Members’ Needs
August 4, 2022
There was a time when the bill from Trico was simply called “the light bill”. This is because lighting was the primary thing for which people needed electricity. But this behind‑the-meter world underwent a technological revolution, and electricity became the lifeblood of homes, businesses, farms and ranches.
A similar shift is occurring today. A technological revolution is creating new forms of energy generation, storage and other grid-enabling services that are changing the operation of the grid from a simple “generate-transmit-distribute” model into something more complex that, if properly leveraged, can deliver huge amounts of value to Members.
In most respects, energy has always been sold as a service. Members don’t buy electrons as much as they buy lighting, heating, cooling and now charging services, that are provided by equipment that uses electricity. Electricity consumption in effect is the consumption of energy services.
The Trico electricity system on which our Members depend is changing, powered by technological innovations, increased use of distributed energy resources (DER) on what has traditionally been a centralized power system, and changing Member needs and preferences in an increasingly connected world.
The increasing demand for system reliability and carbon reduction, coupled with the increasing capabilities of DERs to contribute to these goals, means new price signals are necessary. Rate designs need to follow suit to encourage the beneficial adoption of new technologies, like electric vehicles and DER. In other words, rate design is a significant component of the changes needed to modernize our gird. Fred Butler, former National Association of Regulatory Utility Commissioners (NARUC) President, once said, “You can’t have a smart grid with dumb rates.”
Your cooperative has established a strategic initiative, along with corresponding strategic projects, to design prices to provide options that meet Member’s needs. Over the course of the next few years, Trico will be developing and seeking approval – from the Arizona Corporation Commission (ACC) – to introduce several pricing options that Members have indicated an interest in. Examples include more time-of-day pricing options, critical peak pricing options (with low off-peak rates), and electric vehicle rates. We are also developing optional programs and pricing for when Trico can benefit by buying energy and capacity from Members who have on-site generation or storage technologies.
Ultimately, we want to meet the individual and collective needs of the membership. Offering a portfolio of pricing options is just one way we intend to do that. Watch my column for more information as these are rolled out.