New developments in utility rate design

Journal Article · Thu Jan 01 04:00:00 EST 1976 · Electr. Perspect.; (United States)

OSTI ID:7125314

Jefferson, W J

Field research, in spite of its expense, is needed to produce meaningful data on the ramifications of proposed utility rate designs. Adoption of any of these proposals without adequate research can result in poor decisions that will drastically alter utility financing. Defined in this review are flat, inverted, lifeline, and penalty rates, peakload pricing, and long-run incremental costs. Flat rates impose a unit price on all customers regardless of cost to serve. Inverted, or graduated, rates increase unit price with consumption to shift capital costs on heavy users. Lifeline, or below-cost, rates are designed for low-income customers who might be better served with an energy-stamp program. Peakload pricing imposes higher rates for peak usage in order to redistribute demand. Joint studies of this plan are examining historical and foreign price structures, electricity price elasticity, load management, cost analysis, rate design, metering equipment and controls, and customer acceptance. Many economists fear long-run incremental costs may result in serious economic dislocations if prices and rates shift drastically. Penalty rates for wasteful use of natural gas in the form of surcharges are intended primarily to promote conservation. (DCK)

• Research Organization: Consumers Power Co., Jackson, MI
• OSTI ID: 7125314
• Journal Information: Electr. Perspect.; (United States), Journal Name: Electr. Perspect.; (United States) Vol. 6; ISSN ELPED
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
200106 -- Fossil-Fueled Power Plants-- Economics
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
CHARGES
COST
ECONOMIC ELASTICITY
ECONOMIC POLICY
ECONOMICS
ELECTRIC POWER
ENERGY CONSUMPTION
EQUIPMENT
LOAD MANAGEMENT
MANAGEMENT
PEAK-LOAD PRICING
POWER
PUBLIC RELATIONS
PUBLIC UTILITIES
SOCIO-ECONOMIC FACTORS