Peak load pricing: benefits vs. drawbacks

Journal Article · Mon Nov 01 04:00:00 EST 1976 · Tex. Energy; (United States)

OSTI ID:7237517

Recent substantial increases in electric power generating costs and the resulting higher costs to consumers are causing electric utility companies and commissions to consider various ways to reduce generating costs. Alternate pricing schemes, such as peak-load or time-differentiated pricing, have been proposed. Peak-load pricing has been used in various forms in many European countries. However, the benefits and liabilities of using peak-load pricing in the United States have not yet been determined, and the concept is complex. Some electrical rate experts caution against adoption of peak-load pricing without consideration of all possible consequences. Some of these considerations are presented here. Dr. A. D. Patton, Texas A and M University, explains peak-load pricing as a system in which ''the consumer pays for the energy he uses at a rate that truly reflects the cost of providing the energy.'' A peak-load pricing scheme attempts to establish rate differentials that reflect the times of heavy, moderate, or light electric system loading. Rates during peak periods are higher because electric generation during peak periods is more expensive. Patton believes that peak-load pricing should be studied very carefully. To evaluate peak-load pricing and to consider the additional costs, the entire scheme must be studied in a systems context. It is important to consider the effect of load leveling on electric utility operation as well as the benefits derived from a peak-load pricing scheme. (MCW)

• OSTI ID: 7237517
• Journal Information: Tex. Energy; (United States), Journal Name: Tex. Energy; (United States) Vol. 3:1; ISSN TEEND
• 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
296000* -- Energy Planning & Policy-- Electric Power
CAPITAL
CHARGES
COST
ECONOMICS
ELECTRIC POWER
ENERGY CONSUMPTION
NORTH ATLANTIC REGION
PEAK-LOAD PRICING
POWER
POWER GENERATION
PUBLIC UTILITIES
RELIABILITY
SYSTEMS ANALYSIS
VERMONT