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Application of the expenditure function in electricity pricing: optimal residential time-of-use rate option

Journal Article · · Energy J.; (United States)
This analysis presents the optimal time-of-use (TOU) electricity rates and the standard flat rate. It also proves that social welfare is higher under optimal rates than under mandatory pricing with only one rate schedule. The author develops an index for identifying customer type based on consumption history. Within each market defined by climatic band and appliance ownership, variation in historical use comes largely from differences in income, making past billing a satisfactory way to classify customers. However, the resulting optimization problem is mathematically almost intractable, and offers few insights into the issue of designing an optimal TOU rate option. 26 references.
Research Organization:
Pacific Gas and Electricity Co., San Francisco, CA
OSTI ID:
5621094
Journal Information:
Energy J.; (United States), Journal Name: Energy J.; (United States) Vol. 6:2; ISSN ENJOD
Country of Publication:
United States
Language:
English