Designing Pareto-superior demand-response rate options

I. Horowitz, Chi-Keung WOO*

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    39 Citations (Scopus)


    We explore three voluntary service options - real-time pricing, time-of-use pricing, and curtailable/interruptible service - that a local distribution company might offer its customers in order to encourage them to alter their electricity usage in response to changes in the electricity-spot-market price. These options are simple and practical, and make minimal information demands. We show that each of the options is Pareto-superior ex ante, in that it benefits both the participants and the company offering it, while not affecting the non-participants. The options are shown to be Pareto-superior ex post as well, except under certain exceptional circumstances.

    Original languageEnglish
    Pages (from-to)1040-1051
    Number of pages12
    Issue number6-7
    Publication statusPublished - 2006

    Scopus Subject Areas

    • Civil and Structural Engineering
    • Building and Construction
    • Pollution
    • Mechanical Engineering
    • Industrial and Manufacturing Engineering
    • Electrical and Electronic Engineering


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