Rate structure effects and regression parameter instability across time-of-use electricity pricing experiments

Customer Response to RTP in Competitive Markets: A Study of Niagara Mohawk’s Standard Offer Tariff

“…7 Due to the continuous nature of electricity supply and usage, defining what constitutes peak and off-peak is an empirical question driven by prices and the circumstances by which customers use and value electricity. Studies of price response to time-ofuse (TOU) rates typically utilize either pooled data for customers participating in different TOU rates or data that are pooled across several treatments where prices or the definition of the on-peak period vary by the experimental design (Caves, et al, 1984;Patrick, 1990;Braithwait, 2000). To establish a uniform definition of distinct electricity commodities, peak and off-peak electric energy, Caves, et al (1987) identified six separate commodities facing customers.…”

Customer response to day-ahead wholesale market electricity prices: Case study of RTP program experience in New York

“…Most studies of large customer RTP employ a demand model to estimate the substitution elasticity (Herriges et al 1993;Schwarz et al 2002) or have modeled peak and off-peak electricity as substitutes (Patrick, 1990;Caves et al, 1984;Herriges et al, 1993;Braithwait, 2000). The substitution elasticity describes how the relative use of inputs that are substitutes in a production process changes in response to the relative prices of the two inputs.…”

“…To adjust our characterization of price response to recognize these behaviors, we employed a Load Response Characterization (LRC) Model, adapting a model introduced by Patrick (1990), which distinguishes load shifting from foregoing discretionary consumption, which Patrick defines as conservation. A conservation behavior parameter is estimated from customers' hourly electricity usage data to express the degree of foregone consumption relative to a customer baseline (CBL).…”

“…To recognize these behaviors, we employed a Load Response Characterization model (LRC), adapted from Patrick (1990), which provides empirical estimates of the degree to which SC-3A customers shift load from peak to off-peak periods versus conserving energy without increased consumption in off-peak periods. We then combined these results with substitution elasticity estimates to predict the level of DR that can be expected from SC-3A customers during high-price events.…”

“…To adjust our characterization of price response to recognize these behaviors, we employed a Load Response Characterization (LRC) Model, adapting a model introduced by Patrick (1990), which distinguishes load shifting from foregoing consumption. The LRC model specifies an empirical relationship between the total daily load change and the change in peak load as follows:…”