Avoided Gigawatts Through Utility Capital Recovery Fees

Abstract

Electric rate structures can be used to provide customers with the proper pricing signals as well as provide economic incentives for increased market penetration for energy efficient new buildings. An innovative, marginal (replacement cost) rate structure is possible through the use of capital recovery fees for new electric meter hookups similar to those commonly used for new water and wastewater hookups where the developer/owner is required to capitalize the marginal cost of new demand. By giving credit for the more efficient loads placed on an electric utility system, a utility could rapidly advance the market penetration of commercially available, highly efficient building systems and equipment resulting in potential gigawatts of conserved energy. Simultaneously, the capital costs of new generating plants could be shifted to the end-user from the already debt-burdened electric utility industry. This paper will explore this pricing option and analyze its potential on future electric load growth and the design of efficient new buildings.