IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2509.08166.html
   My bibliography  Save this paper

A Linear Pricing Mechanism for Load Management in Day-Ahead Retail Energy Markets

Author

Listed:
  • Phillippe K. Phanivong
  • Duncan S. Callaway

Abstract

Regulators and utilities have been exploring hourly retail electricity pricing, with several existing programs providing day-ahead hourly pricing schedules. At the same time, customers are deploying distributed energy resources and smart energy management systems that have significant flexibility and can optimally follow price signals. In aggregate, these optimally controlled loads can create congestion management issues for distribution system operators (DSOs). In this paper, we describe a new linear pricing mechanism for day-ahead retail electricity pricing that provides a signal for customers to follow to mitigate over-consumption while still consuming energy at hours that are preferential for system performance. We show that by broadcasting a linear price designed for price-signal control of cost-optimizing loads, we can shape customer load profiles to provide congestion management without the need for bi-directional communication or customer bidding programs.

Suggested Citation

  • Phillippe K. Phanivong & Duncan S. Callaway, 2025. "A Linear Pricing Mechanism for Load Management in Day-Ahead Retail Energy Markets," Papers 2509.08166, arXiv.org.
    • Handle: RePEc:arx:papers:2509.08166
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2509.08166
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tim Schittekatte & Dharik S. Mallapragada & Paul L. Joskow & Richard Schmalensee, 2022. "Electricity Retail Rate Design in a Decarbonized Economy: An Analysis of Time-Of-Use and Critical Peak Pricing," NBER Working Papers 30560, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Silvana Tiedemann & Raffaele Sgarlato & Lion Hirth, 2023. "Price elasticity of electricity demand: Using instrumental variable regressions to address endogeneity and autocorrelation of high-frequency time series," Papers 2306.12863, arXiv.org.
    2. Enrich, Jacint & Li, Ruoyi & Mizrahi, Alejandro & Reguant, Mar, 2024. "Measuring the impact of time-of-use pricing on electricity consumption: Evidence from Spain," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    3. Alberini, Anna & Bezhanishvili, Levan & Ščasný, Milan, 2024. "Heterogeneous effects of government energy assistance programs: Covid-19 lockdowns in the republic of Georgia," Energy Economics, Elsevier, vol. 139(C).
    4. Cabot, Clément & Villavicencio, Manuel, 2024. "Second-best electricity pricing in France: Effectiveness of existing rates in evolving power markets," Energy Economics, Elsevier, vol. 136(C).
    5. Khorramfar, Rahman & Mallapragada, Dharik & Amin, Saurabh, 2024. "Electric-gas infrastructure planning for deep decarbonization of energy systems," Applied Energy, Elsevier, vol. 354(PA).
    6. López Prol, Javier & Paul, Arijit, 2024. "Profitability landscapes for competitive photovoltaic self-consumption," Energy Policy, Elsevier, vol. 188(C).
    7. Lang, Corey & Qiu, Yueming (Lucy) & Dong, Luran, 2023. "Increasing voluntary enrollment in time-of-use electricity rates: Findings from a survey experiment," Energy Policy, Elsevier, vol. 173(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2509.08166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.