A time-of-use rate option design allowing an LDC's customers to allocate their consumption to be billed at the fixed and daily-varying TOU rates offers a win-win mechanism for electricity procurement in the face of uncertain spot prices and hedging options. Even if all customers have the same risk preferences, the proposed mechanism is Pareto-superior to the tariffs and procurement strategies commonly used in North America.
Scopus Subject Areas
- Business and International Management
- Energy (miscellaneous)
- Management of Technology and Innovation