Projected Nationwide Energy and Capacity Savings from Peak-Load Pricing of Electricity in the Industrial Sector

摘要

This report presents estimates of adjustments that U.S. manufacturing industrial consumers of electricity might make if they were to face time-of-day electricity rates. Because there is very little experience in this country with such rates, the estimates given here are based on an analysis of industry-specific responses observed in France and other West European countries where time-of-day pricing has been in effect for two or more decades. The analysis reported here is based in part on that in Rand report R-2106-CERCDC, Electricity Pricing and Load Management: Foreign Experience and California Opportunities. The report concludes with observations about policies that may ease the transition to more complicated pricing schemes. In some circumstances, the introduction of time-of-day pricing may lower the total costs of electricity to industrial customers because their use is predominantly off-peak. In any case, the disruption to industry is not likely to be great because energy is such a small percentage of the total cost of doing business. In industries where energy cost is a large fraction of the cost of doing business, European experience suggests that firms can readily respond to time-of-day pricing. (ERA citation 04:026790)