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Proposed Rates <br /> commercial customers. From a rate design and cost-of-service basis it is a defendable <br /> position. It is important that as this change is made, the utility needs to be aware of the <br /> customers that will be impacted. Some of their bills will naturally increase and some will <br /> decrease. The customers with increasing bills (those with low load factors) should be <br /> apprised of steps they can take to lower their effective demands to minimize the impact <br /> on their bills. <br /> Large Industrial Rate <br /> ERMU currently bills demand and large demand customers utilizing the same rate. <br /> Some utilities have a separate large industrial rate for very large demand customers. A <br /> separate rate for customers larger than a high level (ie. 1000 kW) is generally lower <br /> than a regular demand customer rate. This is done under the theory that large <br /> customers are less expensive to serve on a per unit basis due to larger economies of <br /> scale. This may or may not be the case. Often times, large customers desire a <br /> different level of service for reliability reasons. This scenario could actually result in <br /> more per unit costs to serve large customers. A well designed demand and energy rate <br /> can be fair and equitable for customers of various sizes. If ERMU wishes to consider a <br /> large industrial rate, it may be prudent to establish a new rate class for those customers <br /> even if the rates remain the same for demand and large demand customers. That <br /> would allow ERMU to change the rates for large industrial customers as compared to <br /> demand customers without needing to also establish a separate class at that time. <br /> Net Metering <br /> Net metering is a billing mechanism where customers with distributed generation (like <br /> rooftop solar) are credited for electricity they deliver back to the distribution system. For <br /> example, if a residential customer has a solar system on the home's rooftop, it may <br /> generate more electricity than the home uses during daylight hours. If the home is net- <br /> metered, the utility pays the customer for the excess generation. The rate paid for the <br /> excess generation varies by state and utility. <br /> - 5 - <br /> 85 <br />