Profiling the Critical Role of the New Pricing Organization

Abstract

This paper describes the changing role of the electric rates group within evolving power markets. In the world of franchised utilities, the rates group was focused on gaining approval from regulators and implementing tariffs that satisfied revenue needs. The Energy Policy Act of 1992 provided the framework for competition in wholesale generation markets, which have since flourished under open access transmission. Since 1992, competition has also nibbled away at the periphery of retail markets, and retail access is being implemented in several states. No one is surprised about the enlarged role of the rates group — or perhaps more appropriately, the pricing organization — as the design of retail services is now strategically important. This paper describes how the rates group is changing, and presents a vision of the pricing organization of the future