British Industrial Response to the Peak-Load Pricing of Electricity

by Jan Paul Acton, Ellen H. Gelbard, James Hosek, Derek McKay


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This examination of customer responsiveness to peak-load, or time-of-use (TOU), electricity tariffs focuses on responses by individual industrial customers in England and Wales and relies on in-person interviews with representatives of firms. The design of peak-load tariffs depends on the projected extent of customer response, and if peak demands are reduced by TOU pricing, then less aggregate generating and transmission capacity will be needed to meet the load, operating costs will be reduced, and savings to both the customers and the utility system will result. The British experience is suggestive of one pattern of long-run adjustment to TOU pricing. The report examines the likelihood of a similar pattern of response in the United States and other advanced countries.

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