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Optimal Off-peak Incremental Sales Rate Design in Electricity Pricing

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  • Chi-Keung Woo
  • Dewy Q. Seeto

Abstract

Nonlinear pricing has recently become a subject of intense research in utility pricing. This research begins with the work on multipart tariffs which points out the superiority of nonlinear pricing over linear pricing and the importance of self-selection in regulatory pricing (see e.g., Brown and Sibley (1986), Faulhaber and Panzar (1977), Willig (1978) and Mirman and Sibley (1980)). That is, by providing a menu of rate options from which a ratepayer chooses what he most prefers, the utility and the ratepayers are both better off than when only one linear rate schedule is available (e.g., a non-time differentiated energy charge).

Suggested Citation

  • Chi-Keung Woo & Dewy Q. Seeto, 1988. "Optimal Off-peak Incremental Sales Rate Design in Electricity Pricing," The Energy Journal, , vol. 9(1), pages 95-102, January.
    • Handle: RePEc:sae:enejou:v:9:y:1988:i:1:p:95-102
    DOI: 10.5547/ISSN0195-6574-EJ-Vol9-No1-8
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    References listed on IDEAS

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    1. Joseph G. Hirschberg & Dennis J. Aigner, 1983. "An Analysis of Commercial and Industrial Customer Response to Time-of-Use Rates," The Energy Journal, , vol. 4(1_suppl), pages 103-126, June.
    2. J. Stephen Henderson, 1986. "Price Discrimination Limits in Relation to the Death Spiral," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 33-50.
    3. Brown,Stephen J. & Sibley,David Sumner, 1986. "The Theory of Public Utility Pricing," Cambridge Books, Cambridge University Press, number 9780521314008, November.
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