Electricity rates are inefficient, which makes them inequitable.

What do we mean by economic inefficiency?

The price of consuming it doesn't match cost of producing / distributing it.

Why is that a problem?

•  Generation: expensive, polluting peakers are overused
•  Transmission & Distribution: grid is overbuilt

Impact: current grid isn't used well, so electricity is more expensive than it needs to be, which was equity issues. 

About to get way worse.

• Split the bill

• Make each part cost-reflective

• For energy: $/kWh that reflects time

• For network: $/kW that reflects O&M for current infra
  CAPEX for next infra

• Spain: per-kWh TOU for energy,
               2-part per-kW subscription for dist. network

• France:  flat/2-part TOU/critical peak rate per-kWh for energy
                  declining block per-kW subscription for network

• Italy:  per-kWh TOU energy
             per-kW subscription for network

• EU reg 2019/943 mandates member states to implement cost-reflective dist. network rates

• 25 / 27 EU counties have some from of kW capacity charge

• ~1/3 EU households facing TOU or capacity-based network rate

• Future network costs must be reflected to grid users through rate

• 73% has smart meters, vast majority on flat volumetric

• Opt-out / default TOU
  CA:  TOU (2 or 3 part) for both energy & network
  HI:   TOU for energy, demand charge for network
  MO: TOU (with 5:1 ratio) for Evergy energy & network
  MI:   TOU for DTE Energy energy & network

• Many utilities offer per-kW capacity charges for CI customers