The Effect of Time-of-Use Rates
Facts vs. Opinions
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In a recent [Public Utilities Fortnightly] article, Hans Nissel questioned the calculations in an earlier RAND study and contended that time-of-use (TOU) rates will have no effect on electricity consumption. The authors present a correction to their study, but reaffirm that the findings of their research and of ten other studies support the original conclusion that TOU rates change load curves. They then examine Nissel's principal assertions about electricity pricing and argue that his views are not supported by either facts or the personal communications on which he often relies. The authors conclude by considering the challenges that face U.S. utilities as they move into the less familiar territory of introducing and modifying TOU rates.
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