Retail rates primarily aim to recover a utility’s revenue requirement efficiently and equitably while reflecting the cost structure and providing clear price signals. These signals encourage optimal consumption, ensure bill and revenue stability, and remain understandable to customers. When rates include objectives like incentivizing technologies or subsidies, they risk inefficiency, cost shifts, and inaccurate signals leading to over- or under-consumption. Time-of-Use (TOU) and Critical Peak Pricing (CPP) rates are ideal for renewable energy systems, shifting loads to low-price hours and managing peak demands locally and system-wide.

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