The perils of dynamic electricity pricing tariffs in the presence of retail market imperfections

Mahnoosh Alizadeh; Andrea Goldsmith; Anna Scaglione

doi:10.1109/ACSSC.2015.7421219

The perils of dynamic electricity pricing tariffs in the presence of retail market imperfections

Mahnoosh Alizadeh, Andrea Goldsmith, Anna Scaglione

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

1 Scopus citations

Abstract

In this paper, we show that the profit maximizing nature of electricity retailers, combined with boundedly rational customer behavior, might induce physical operational problems for the power grid under dynamic retail pricing. This is because, under certain conditions, retailers will be incentivized to design prices that shift load away from supply, further increasing the demand supply gap. We propose an alternative pricing method, referred to as differentiated pricing, which does not suffer from this issue. Our analysis is based on a simple demand model in order to gain useful insights on the repercussions of ignoring retail market imperfections.

Original language	English (US)
Title of host publication	Conference Record - Asilomar Conference on Signals, Systems and Computers
Publisher	IEEE Computer Society
Pages	683-688
Number of pages	6
Volume	2016-February
ISBN (Print)	9781467385763
DOIs	https://doi.org/10.1109/ACSSC.2015.7421219
State	Published - Feb 26 2016
Event	49th Asilomar Conference on Signals, Systems and Computers, ACSSC 2015 - Pacific Grove, United States Duration: Nov 8 2015 → Nov 11 2015

Other

Other	49th Asilomar Conference on Signals, Systems and Computers, ACSSC 2015
Country/Territory	United States
City	Pacific Grove
Period	11/8/15 → 11/11/15

ASJC Scopus subject areas

Computer Networks and Communications
Signal Processing

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10.1109/ACSSC.2015.7421219

Cite this

The perils of dynamic electricity pricing tariffs in the presence of retail market imperfections. / Alizadeh, Mahnoosh; Goldsmith, Andrea; Scaglione, Anna.
Conference Record - Asilomar Conference on Signals, Systems and Computers. Vol. 2016-February IEEE Computer Society, 2016. p. 683-688 7421219.

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

Alizadeh, M, Goldsmith, A & Scaglione, A 2016, The perils of dynamic electricity pricing tariffs in the presence of retail market imperfections. in Conference Record - Asilomar Conference on Signals, Systems and Computers. vol. 2016-February, 7421219, IEEE Computer Society, pp. 683-688, 49th Asilomar Conference on Signals, Systems and Computers, ACSSC 2015, Pacific Grove, United States, 11/8/15. https://doi.org/10.1109/ACSSC.2015.7421219

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The perils of dynamic electricity pricing tariffs in the presence of retail market imperfections

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