Price Elasticity and Electricity Rate Design

摘要

>The level of price elasticity for electricity service has always been a subject rife with controversy. Estimates of price elasticity in this industry have varied widely, and little if any consensus exists on what the true level of price elasticity is. This lack of consensus is evident in regulatory filings involving electricity rate increases, where price elasticity is generally ignored as a factor influencing future sales and revenues after the rate increases occur. Complicating the issue further is the question of exactly what price (if any) electricity customers are responding to: the total bill, the marginal (per kWh) rate, or some combination thereof. And of course, the answer to this question will be affected by the existence of any customer‐facing programs that make consumers more aware of and/or provide incentives to respond to time‐varying electricity prices.