Wealth transfer from implementing real-time retail electricity pricing:
"Adoption of real-time electricity pricing--retail prices that vary hourly to reflect changing wholesale prices--removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likel...
Gespeichert in:
| 1. Verfasser: | |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2005
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| Schriftenreihe: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
11594 |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | "Adoption of real-time electricity pricing--retail prices that vary hourly to reflect changing wholesale prices--removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data on a random sample of 636 industrial and commercial customers in southern California, I show that RTP adoption would result in significant transfers compared to a flat-rate tariff. When compared to the time-of-use rates (simple peak/offpeak tariffs) that these customers already face, however, the transfers drop by nearly half; even under the more extreme price volatility scenario that I examine, 90% of customers would see changes of between a 9% bill reduction and a 14% bill increase. Though customer price responsiveness reduces the loss incurred by those with high-cost demand profiles, I also demonstrate that this offsetting effect is unlikely to be large enough for most customers with costly demand patterns to completely offset their lost cross-subsidy. The analysis suggests that adoption of real-time pricing may be difficult without a supplemental program that compensates the customers who are made worse off by the change. I discuss how "two-part RTP" programs, which allow customers to purchase a baseline quantity at regulated TOU rates, can reduce the transfers associated with adoption of RTP"--National Bureau of Economic Research web site. |
| Beschreibung: | 18 S. |
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| 520 | 3 | |a "Adoption of real-time electricity pricing--retail prices that vary hourly to reflect changing wholesale prices--removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data on a random sample of 636 industrial and commercial customers in southern California, I show that RTP adoption would result in significant transfers compared to a flat-rate tariff. When compared to the time-of-use rates (simple peak/offpeak tariffs) that these customers already face, however, the transfers drop by nearly half; even under the more extreme price volatility scenario that I examine, 90% of customers would see changes of between a 9% bill reduction and a 14% bill increase. Though customer price responsiveness reduces the loss incurred by those with high-cost demand profiles, I also demonstrate that this offsetting effect is unlikely to be large enough for most customers with costly demand patterns to completely offset their lost cross-subsidy. The analysis suggests that adoption of real-time pricing may be difficult without a supplemental program that compensates the customers who are made worse off by the change. I discuss how "two-part RTP" programs, which allow customers to purchase a baseline quantity at regulated TOU rates, can reduce the transfers associated with adoption of RTP"--National Bureau of Economic Research web site. | |
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| id | DE-604.BV023591660 |
| illustrated | Not Illustrated |
| index_date | 2024-07-02T22:41:28Z |
| indexdate | 2024-07-09T21:25:11Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016906990 |
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| physical | 18 S. |
| publishDate | 2005 |
| publishDateSearch | 2005 |
| publishDateSort | 2005 |
| publisher | National Bureau of Economic Research |
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| series | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| series2 | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| spelling | Borenstein, Severin Verfasser (DE-588)12875236X aut Wealth transfer from implementing real-time retail electricity pricing Severin Borenstein Cambridge, Mass. National Bureau of Economic Research 2005 18 S. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11594 "Adoption of real-time electricity pricing--retail prices that vary hourly to reflect changing wholesale prices--removes existing cross-subsidies to those customers that consume disproportionately more when wholesale prices are highest. If their losses are substantial, these customers are likely to oppose RTP initiatives unless there is a supplemental program to offset their loss. Using data on a random sample of 636 industrial and commercial customers in southern California, I show that RTP adoption would result in significant transfers compared to a flat-rate tariff. When compared to the time-of-use rates (simple peak/offpeak tariffs) that these customers already face, however, the transfers drop by nearly half; even under the more extreme price volatility scenario that I examine, 90% of customers would see changes of between a 9% bill reduction and a 14% bill increase. Though customer price responsiveness reduces the loss incurred by those with high-cost demand profiles, I also demonstrate that this offsetting effect is unlikely to be large enough for most customers with costly demand patterns to completely offset their lost cross-subsidy. The analysis suggests that adoption of real-time pricing may be difficult without a supplemental program that compensates the customers who are made worse off by the change. I discuss how "two-part RTP" programs, which allow customers to purchase a baseline quantity at regulated TOU rates, can reduce the transfers associated with adoption of RTP"--National Bureau of Economic Research web site. Electric utilities Rates Time-of-use pricing California Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 11594 (DE-604)BV002801238 11594 http://papers.nber.org/papers/w11594.pdf kostenfrei Volltext |
| spellingShingle | Borenstein, Severin Wealth transfer from implementing real-time retail electricity pricing National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Electric utilities Rates Time-of-use pricing California |
| title | Wealth transfer from implementing real-time retail electricity pricing |
| title_auth | Wealth transfer from implementing real-time retail electricity pricing |
| title_exact_search | Wealth transfer from implementing real-time retail electricity pricing |
| title_exact_search_txtP | Wealth transfer from implementing real-time retail electricity pricing |
| title_full | Wealth transfer from implementing real-time retail electricity pricing Severin Borenstein |
| title_fullStr | Wealth transfer from implementing real-time retail electricity pricing Severin Borenstein |
| title_full_unstemmed | Wealth transfer from implementing real-time retail electricity pricing Severin Borenstein |
| title_short | Wealth transfer from implementing real-time retail electricity pricing |
| title_sort | wealth transfer from implementing real time retail electricity pricing |
| topic | Electric utilities Rates Time-of-use pricing California |
| topic_facet | Electric utilities Rates Time-of-use pricing California |
| url | http://papers.nber.org/papers/w11594.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT borensteinseverin wealthtransferfromimplementingrealtimeretailelectricitypricing |