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A new approach to peak load pricing
Author(s) -
Main Robert S.
Publication year - 1981
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090020303
Subject(s) - slicing , context (archaeology) , variable (mathematics) , series (stratigraphy) , computer science , mathematical optimization , economics , microeconomics , econometrics , mathematical economics , mathematics , geology , mathematical analysis , paleontology , world wide web
This paper explores an alternative method of ‘solving’ the problem of recurring time variable demands in a public utility context. It views the utility's load curve as a series of horizontal layers or ‘slices’ of varying lengths, rather than as a series of vertical slices as in the traditional approach. Several cases are examined, and traditional time‐of‐day pricing is shown to be inefficient or inapplicable in some of them, while ‘demand‐layer’ pricing, based on horizontal slicing, is efficient. In still other cases, neither method of pricing is efficient.