Distribution Reliability Charge: Transitioning to Sustainable Rate Design

Electricity bills for residential customers in many states often combine a low fixed monthly charge with flat rates for electricity consumed and delivered charged on a per-kilowatt hour basis. Traditionally, this structure has worked for utilities by providing a simple mechanism to recover enough revenue to build, maintain, and operate the grid. This existing rate design for residential customers has many positive features, but is a blunt and inefficient instrument in many respects. Changes in electricity rate design can help address a number of different issues -- these comments address address two issues in particular and reforms that could facilitate a transition to more sustainable rate design.