A New Approach to Peak Load Pricing

Document Type

Article

Publication Date

1981

Publication Title

Managerial and Decision Economics

First Page

139

Last Page

144

DOI

http://dx.doi.org/10.1002/mde.4090020303

Abstract

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.

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Version of Record can be found through Wiley.

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