Electricity Consumption by Time of Use in a Hybrid Demand System

The results of behavior under time-of-use (TOU) plans in the Los Angeles Electricity Rate Study are presented using a hybrid system of TOU demand equations for evaluating and forecasting the effects of TOU pricing. The hybrid model involves three stages: (1) The variation in consumption in each rate period that results from the month-to-month variation in weather is estimated and each household's consumption adjusted to a level corresponding to average weather conditions. (2) The effect of prices and household characteristics on the adjusted consumption in each rate period is determined. (3) The level of total electricity consumption is explained by household characteristics and the average price of electricity in peak and off-peak hours. Estimates from the hybrid model are superior to those obtained by single-equation methods and do not require the highly restrictive assumptions used in many demand systems. TOU rates are shown to change the distribution of electricity consumption by period of the day as well as affect the total quantity of electricity.