Salla Annala received her M.Sc. in electrical engineering in 2008. She is currently working as a researcher in the Laboratory of Electricity Markets and Power Systems in Lappeenranta University of Technology, Finland. Her research interests include functioning of competition and customer behavior in retail electricity markets. Satu Viljainen is a professor of electricity markets at Lappeenranta University of Technology, Finland. Her present research interests include competition and regulation in deregulated electricity markets, and the Russian electricity market development. She gained her M.Sc. in electrical engineering and D.Sc. (Tech.) from Lappeenranta University of Technology in 2001 and 2005, respectively. Jussi Tuunanen received his M.Sc. in electrical engineering in 2009. He is currently working as a researcher in the Laboratory of Electricity Markets and Power Systems in Lappeenranta University of Technology, Finland. His research interests include efficient use of electricity and electricity pricing in the smart grid environment.

Purpose -This paper aims to study the rationality of residential electricity customers' decision-making based on their behavior in liberalized electricity markets. Design/methodology/approach -Finnish residential customers' saving opportunities from supplier switching are studied by using price data obtained from the Finnish Energy Market Authority. The saving opportunities are then compared with the switches accomplished. The paper also examines the dispersion of offer prices (the prices that are offered to customers who wish to switch away from the default contract) by comparing all the offers for one-and two-year contracts in the largest network area in Finland (2007Finland ( -2010. Findings -About 60-70 percent of residential customers are estimated to purchase electricity under a default contract from their local supplier. However, notable savings might be achieved by switching from default contracts to competitive contracts. The analysis shows that for the majority of customers, the offer prices were always cheaper than the default contract prices during the examined period. For customers with electric heating, the average saving opportunity (compared to the default price) was over e200 year in 2009 and 2010. The range of offer prices for contracts with similar terms has not decreased despite the regulator's efforts to facilitate supplier switching by providing a price comparison service. The discrepancy between saving opportunities and switching rates reflects the effects of the limits of consumer rationality in the retail electricity markets. Originality/value -The paper presents a longitudinal study about the benefits of supplier switching and the development of offer price dispersion.

Purpose – The purpose of the paper is to analyze the development needs and opportunities in the distribution system operators’ (DSO) tariff structures in the smart-grid environment. Design/methodology/approach – The impacts of the distribution pricing schemes for the stakeholders and their requirements for the tariff structures are evaluated by qualitative analyses. Furthermore, there is a case analysis concerning the practical development possibilities of the DSO tariff structures in Finland. Findings – Major finding of the paper is that the demand-based power band tariff is the optimal solution for the DSO pricing structure, when taking into account the real-life limitations and the requirements of the stakeholders. Practical implications – Outcomes of the paper can be applied in practice in design of the pricing schemes in the electricity distribution. Incentive provision impacts and cost reflectivity of the DSO tariffs can be improved by implementing the suggested pricing structure. Originality/value – The paper provides a novel viewpoint on the study of the DSO tariff design by considering the impacts of the pricing for the stakeholders and their requirements for tariff structure. Furthermore, the real-life limitations in the tariff design have been taken into account by analyzing the development options in Finland. Results are useful, especially for the DSOs, regulators and academics, who are working with the tariff development issues.

The objective of the paper is to develop methodology to analyse the impact of market-based electric heating load control on the distribution network business. In this paper, the spot market-based load control scheme is demonstrated. The main target of the paper is to illustrate the phenomenon of space electric heating load control and its impact on the distribution network. The conflict of interests between the retailer and the DSO is demonstrated. The power band pricing scheme is suggested to be one way to solve the conflict. In the future, micro generation and energy storages could also relieve the conflict. AMR data, electricity spot market prices and outdoor temperature are used in the analyses.

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