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Time-of-day pricing of electrical energy: does it promote the public interest?

Author

Listed:
  • Berlad, A.L.
  • Salzano, F.J.
  • Hoppe, R.J.
  • Batey, J.

Abstract

Time-of-day pricing of electrical energy involves rate incentives designed to encourage a shift of user demand from a utility's peak periods to its off-peak periods. Low “off-peak” rates may also serve as an incentive which encourages large, new, inelastic and/or inefficient uses of electrical energy. In the Long Island, New York, area, installation of air-to-air heat pumps for space heating and cooling may be stimulated by currently proposed time-of-day pricing structures. Possible consequences of a significant market penetration of the Long Island home heating market by the air-to-air heat pump are considered. In this case, serious questions are raised regarding the ability of the time-of-day rate structure to achieve its espoused aims. This case may be typical of other areas throughout the country.

Suggested Citation

  • Berlad, A.L. & Salzano, F.J. & Hoppe, R.J. & Batey, J., 1978. "Time-of-day pricing of electrical energy: does it promote the public interest?," Energy, Elsevier, vol. 3(6), pages 779-784.
    • Handle: RePEc:eee:energy:v:3:y:1978:i:6:p:779-784
    DOI: 10.1016/0360-5442(78)90044-0
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