An exploratory analysis of California residential customer response to critical peak pricing of electricity

Karen Herter, Patrick McAuliffe and Arthur Rosenfeld

Energy, 2007, vol. 32, issue 1, 25-34

Abstract: This paper summarizes the results from an exploratory analysis of residential customer response to a critical peak pricing (CPP) experiment in California, in which 15 times per year participating customers received high price signals dispatched by a local electricity distribution company. The high prices were about three times the on-peak price for the otherwise applicable time-of-use rate. Using hourly load data collected during the 15-month experiment, we find statistically significant load reduction for participants both with and without automated end-use control technologies. During 5-h critical peak periods, participants without control technology used up to 13% less energy than they did during normal peak periods. Participants equipped with programmable communicating thermostats used 25% and 41% less for 5 and 2h critical events, respectively. Thus, this paper offers convincing evidence that the residential sector can provide substantial contributions to retail demand response, which is considered a potential tool for mitigating market power, stabilizing wholesale market prices, managing system reliability, and maintaining system resource adequacy.

Keywords: Residential electricity; Electricity pricing; Critical peak pricing; Demand response; Load response (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (61)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:32:y:2007:i:1:p:25-34

DOI: 10.1016/j.energy.2006.01.014

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