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Dynamic Pricing of Electricity

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  • Paul L. Joskow
  • Catherine D. Wolfram

Abstract

As both a regulator and an academic, Fred Kahn argued that end-use electricity consumers should face prices that reflect the time-varying marginal costs of generating electricity. This has been very slow to happen in the US, even in light of recent technological advances that have lowered costs and improved functionality for meters and automated demand response technologies. We describe these recent developments and discuss the remaining barriers to the proliferation of time-varying electricity pricing.

Suggested Citation

  • Paul L. Joskow & Catherine D. Wolfram, 2012. "Dynamic Pricing of Electricity," American Economic Review, American Economic Association, vol. 102(3), pages 381-385, May.
  • Handle: RePEc:aea:aecrev:v:102:y:2012:i:3:p:381-85
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    References listed on IDEAS

    as
    1. Severin Borenstein & Stephen Holland, 2005. "On the Efficiency of Competitive Electricity Markets with Time-Invariant Retail Prices," RAND Journal of Economics, The RAND Corporation, vol. 36(3), pages 469-493, Autumn.
    2. Severin Borenstein, 2007. "Wealth Transfers Among Large Customers from Implementing Real-Time Retail Electricity Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 131-150.
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    Citations

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    Cited by:

    1. Faruqui, Ahmad & Sergici, Sanem & Lessem, Neil & Mountain, Dean, 2015. "Impact measurement of tariff changes when experimentation is not an option—A case study of Ontario, Canada," Energy Economics, Elsevier, vol. 52(PA), pages 39-48.
    2. repec:eee:appene:v:195:y:2017:i:c:p:1023-1037 is not listed on IDEAS
    3. Stefanie Lena Hille, 2016. "The Myth of the Unscrupulous Energy User’s Dilemma: Evidence from Switzerland," Journal of Consumer Policy, Springer, vol. 39(3), pages 327-347, September.
    4. Helm, Carsten & Mier, Mathias, 2016. "Efficient diffusion of renewable energies: A roller-coaster ride," Annual Conference 2016 (Augsburg): Demographic Change 145893, Verein für Socialpolitik / German Economic Association.
    5. repec:eee:rensus:v:81:y:2018:i:p1:p:1513-1521 is not listed on IDEAS
    6. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins & Robert C. Stowe, 2015. "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Working Papers 2015.28, Fondazione Eni Enrico Mattei.
    7. Wichsinee Wibulpolprasert, 2016. "Optimal Environmental Policies And Renewable Energy Investment: Evidence From The Texas Electricity Market," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-41, November.
    8. Afşar, Sezin & Brotcorne, Luce & Marcotte, Patrice & Savard, Gilles, 2016. "Achieving an optimal trade-off between revenue and energy peak within a smart grid environment," Renewable Energy, Elsevier, vol. 91(C), pages 293-301.
    9. Yalcintas, Melek & Hagen, William T. & Kaya, Abidin, 2015. "Time-based electricity pricing for large-volume customers: A comparison of two buildings under tariff alternatives," Utilities Policy, Elsevier, vol. 37(C), pages 58-68.
    10. repec:eee:energy:v:144:y:2018:i:c:p:887-902 is not listed on IDEAS
    11. Hunt Allcott & Todd Rogers, 2012. "The Short-Run and Long-Run Effects of Behavioral Interventions: Experimental Evidence from Energy Conservation," NBER Working Papers 18492, National Bureau of Economic Research, Inc.
    12. repec:eee:eneeco:v:65:y:2017:i:c:p:458-470 is not listed on IDEAS
    13. Ghaith, Ahmad & Epplin, Francis & Frazier, R. Scott, 2016. "Cost of Oklahoma Grid-tied Solar Panel and Wind Turbine Systems for a Representative Household," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229820, Southern Agricultural Economics Association.
    14. Yumi Yoshida & Kenta Tanaka & Shunsuke Managi, 2017. "Which dynamic pricing rule is most preferred by consumers?—Application of choice experiment," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-11, December.
    15. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2014. "Spatial dynamics of electricity usage in India," Policy Research Working Paper Series 7055, The World Bank.
    16. repec:eee:renene:v:109:y:2017:i:c:p:155-167 is not listed on IDEAS
    17. repec:eee:enepol:v:107:y:2017:i:c:p:1-10 is not listed on IDEAS
    18. repec:pal:jorsoc:v:68:y:2017:i:10:d:10.1057_s41274-016-0149-4 is not listed on IDEAS
    19. Peter Cramton & Axel Ockenfels & Steven Stoft, 2013. "Capacity Market Fundamentals," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    20. Simona Bigerna and Carlo Andrea Bollino, 2015. "A System Of Hourly Demand in the Italian Electricity Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).

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