Rate Design
There are a number of alternatives that a utility can pursue in strategically pricing its services. The utility can make modifications to its rates to better reflect caust causation, reduce exisiting cross subsisdies that currently exist within rate classes, and reduce the differences in the rates of return among the various classes of service.
The Prime Group has assisted more than 150 utilities with developing menus of rate options and with unbundling rates. We have also helped utilities develop pricing strategies that create a value environment for customers. Certain rate structures create an environment in which specific products and service have little value, while other rate structures make these products and services much more valuable. It has been our experience that the reason many energy service companies formed by utilities were not more successful is that their rate designs did not provide a proper value environment for selling these services. The Prime Group has assisted utilities in developing rates to create the proper value environment for energy-related product and service offerings.
The Prime Group provides rate design support for electric, gas, water and waste water utilities.
