1. Utility Pricing in the Prosumer Era: An Empirical Analysis of Residential Electricity Pricing in California
Felipe Castro and Duncan Callaway
Energy & Resources Group
University of California at Berkeley
January, 2016

2. Changes in the electricity sector
Controllers
Controllable devices
Distributed generation
Home storage

3. Rate reform in California

4. Contributing to the policy debate
Flat rate (FR)
Time-of-Use Pricing
(TOU)
TOU + Critical Peak Pricing
(TOU & CPP)
TOU + Demand Charges
(TOU & DC)
Real Time Pricing
(RTP)

5. Good rate design makes a difference
Mild efficiency gains from time-varying pricing.
Some households benefit up to ten time more than others.
Time-varying pricing improves the economics of renewable technologies.

6. Our starting point: Peak-Load Pricing
Price, cost
Quantity

7. The basic model

8. The basic model

9. Flat rate (FR) t
Constraints

10. Time-of-Use (TOU) t
Winter day
Summer day
Constraints

11. Real Time Pricing (RTP)
Day 1
Day 2
Day 3
No constraints

12. Bottom up model household behavior

13. Bottom up model household behavior

14. Bottom up model household behavior

15. An updated version of the basic model

16. An updated version of the basic model

17. Modeling California’s electricity sector
Network model of the Western Interconnection with 240 nodes
Supplement the network with a model of the California residential sector
Split population into four groups
Homeowners / renters
Have central air conditioning / do not have
Supplement the data set with meteorological information

18. Aggregated efficiency gains
Changes with respect to flat rate scenario 15

19. Implications for different households
% of the population
Increase in household’s net surplus as a percentage of the flat rate bill
% increase with respect to flat rate bill

20. Effects on carbon emissions
Changes with respect to flat rate scenario

21. Final thoughts on rate design
Combining a top down with a bottom up approach provides new insights.
Targeting different rates to different customers will likely be a better strategy than defaulting all households into Time-of-Use.
Rate design can help with climate change mitigation efforts.

22. Appendix

23. Effect of renewables
Figure 2. Expected annual changes in the pattern of spring net load (© 2012, California ISO).
Source: Kristov, Lorenzo, and Stephen Keehn. “Chapter 11 - From the Brink of Abyss to a Green, Clean, and Smart Future: The Evolution of California’s Electricity Market.” In Evolution of Global Electricity Markets, edited by Fereidoon P. Sioshansi, 297–329. Boston: Academic Press,

24. Network model 240 – bus network model Exogenous time series
Avg. production MWh

25. Geographic locations of generating technologies
biomass
coal
exogenous demand
gas adv. CC
gas adv. CT
gas conv. CC
geothermal
hydro
nuclear
solar
wind

26. Economic parameters of generating technologies

27. Household counts per block group and node
Units per block group
Units per node

28. AC ownership and temperatures
Temperature and Solar production
Households with AC
Households with no AC
Solar irradiance [kWh]
Count
Count
Avg. temperature [°C]

29. Introducing heterogeneity and adoption
Household in North California
Household in South California
Retail customers
Array of technologies
PV panel + storage
Smart thermostat
Smart thermostat + PV panel
PV panel
Tariffs
Time of Use in PGE
Time of Use in SCE

30. Generalizing rate structures
Peak-load pricing demand-contingent fee
Generalized demand-contingent fee
hourly consumption
hourly consumption +
other metrics
hourly charges
hourly charges +
additional charges