Analyzing the measurement of costs and benefits in peak-load pricing

Journal Article · Thu Aug 02 04:00:00 EDT 1979 · Public Util. Fortn.; (United States)

OSTI ID:6109613

A letter from Alan Fishbein of National Economic Research Associates, Inc. challenges a method published in the March 29, 1979 issue by Robert H. Lande for calculating costs and benefits of peak-load pricing on the grounds that the Lande's procedure ignores consumer preferences and valuation of goods. By failing to analyze the off-peak market, he feels that Lande has not fully analyzed the demand side of the equation; and by omitting the utility's profits from rate structure changes, he has not fully analyzed the supply side. A second letter by Bruce A. Andersen of Duke Power Co. points out that if the load is flattened by peak-load pricing, more reserve will be needed and that the revenue erosion caused by reduced sales must be made up in a later rate review and will reduce the value of peak-load pricing. Lande responds that if rates are based on the marginal cost of producing electricity, consumer satisfaction will increase. He concurs with Andersen's points that society will be better served by demand reduction.

• OSTI ID: 6109613
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 104:3; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
296000 -- Energy Planning & Policy-- Electric Power
COST BENEFIT ANALYSIS
DEMAND FACTORS
ECONOMIC IMPACT
LOAD MANAGEMENT
MANAGEMENT
PEAK-LOAD PRICING
POWER DEMAND
PRICES
SOCIAL IMPACT