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Demand Impact of a Critical Peak Pricing Program: Opt-in and Opt-out Options, Green Attitudes and Other Customer Characteristics

Author

Listed:
  • Steve A. Fenrick
  • Lullit Getachew
  • Chris Ivanov
  • Jeff Smith

Abstract

In this paper, we provide demand impact estimates of a critical peak pricing (CPP) program tested in the summer of 2011. We develop econometric models that examine demand responses of participants in “opt-in,†“opt-out,†and “tech only†CPP programs. Opt-out customers received bill protection while tech only customers received in-home displays alerting them of critical peak times, but they were not placed on the CPP rate. Our results indicate that opt-in customers reduced critical peak period demand the most while opt-out customers’ appear to attenuate their reduction because of bill protection. Additionally, we refine our findings using participant survey responses. In general, we find participants in test groups whose environmental or “green†attitude is high had the strongest demand response.

Suggested Citation

  • Steve A. Fenrick & Lullit Getachew & Chris Ivanov & Jeff Smith, 2014. "Demand Impact of a Critical Peak Pricing Program: Opt-in and Opt-out Options, Green Attitudes and Other Customer Characteristics," The Energy Journal, , vol. 35(3), pages 1-24, July.
    • Handle: RePEc:sae:enejou:v:35:y:2014:i:3:p:1-24
    DOI: 10.5547/01956574.35.3.1
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    References listed on IDEAS

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    1. Ahmad Faruqui & Sanem Sergici, 2011. "Dynamic pricing of electricity in the mid-Atlantic region: econometric results from the Baltimore gas and electric company experiment," Journal of Regulatory Economics, Springer, vol. 40(1), pages 82-109, August.
    2. Ahmad Faruqui & Sanem Sergici, 2010. "Household response to dynamic pricing of electricity: a survey of 15 experiments," Journal of Regulatory Economics, Springer, vol. 38(2), pages 193-225, October.
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    Cited by:

    1. Karsten Neuhoff & Sophia Wolter & Sebastian Schwenen, 2016. "Power Markets with Renewables: New Perspectives for the European Target Model," The Energy Journal, , vol. 37(2_suppl), pages 23-38, June.

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