INDUSTRIAL RESPONSE TO ELECTRICITY REAL-TIME PRICES: SHORT RUN AND LONG RUN |
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| Authors: | Peter M. Schwarz Thomas N. Taylor Matthew Birmingham Shana L. Dardan |
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| Affiliation: | Schwarz;: Professor, Economics Department, University of North Carolina–Charlotte, Charlotte, NC 28223-0001, and Senior Economist, Energy Resource Planning, Research Triangle Institute, Research Triangle Park, NC 27709. E-mail Taylor;: Senior Economist, Rate Department, Duke Power, A Division of Duke Energy Corporation, PB01A, 422 South Church Street, P.O. Box 1244, Charlotte, NC 28201-1244. E-mail Birmingham;: 3712 Bingham Drive, Concord, NC 28027-8539. E-mail Dardan;: Department of Information and Operations Management, University of North Carolina–Charlotte, Charlotte, NC 28223-0001. E-mail |
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| Abstract: | Real-time pricing reduces summer peak demand by approximately 8% for 110 Duke Energy industrial customers. With up to six summers on the rate, the aggregate customer response increases with experience. Examining individual customers, only a subset respond significantly, primarily those who can self-generate or with discrete (batch) production processes. These customers respond significantly above a threshold level of price. Although elasticities decrease slightly at the highest temperatures, the absolute quantity reductions are largest at these times. |
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