Cover: Peak-load pricing of electricity

Peak-load pricing of electricity

by Jan Paul Acton, Bridger M. Mitchell, Willard G. Manning

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Abstract

A brief summary of a series of RAND studies on the potential effects of peak-load pricing of electricity in the United States based on a review of European experience with such pricing. Analysis of European utilities clearly demonstrates that peak-load electricity rates can be successfully incorporated into the routine operations of an electric utility, and that many manufacturing industries can adjust their patterns of consumption in a manner that is beneficial to the utility and cost-saving to the customer. The evidence suggests that important savings to U.S. utilities could accompany the introduction of peak-load pricing, estimated at $0.4 to $1.8 billion per year, in fuel costs alone, and possibly expanding to $1.3 to $3.5 billion when greater efficiencies in both operating and capital costs are realized.

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