Making the Best of the Second-Best: Welfare Consequences of Time-Varying Electricity Prices
研究了小型工商业用户对高峰时段电价上涨的反应，发现价格提高约三倍使高峰用电量下降13.5%，该政策实现了最优连续定价福利收益的44%，并提出了可近乎翻倍福利的改进方案。
In electricity markets, the price paid by retail customers during periods of peak demand is far below the cost of supply. This leads to overconsumption during peak periods, requiring the construction of excess generation capacity compared to first-best prices that adjust at short time intervals to reflect changing marginal cost. This paper investigates the response of infrequently studied small commercial and industrial establishments to a four-hour increase in retail electricity prices invoked by individual utilities during peak demand periods 15 times per year. This policy intends to reduce electricity consumption when generation costs are highest. I find that the approximately tripled prices reduce establishment peak electricity usage by 13.5%. Using a model of capacity investment decisions, I find that the program delivers 44% of the benefits of the first-best policy of continuously varying prices and suggest two simple improvements in program design that could nearly double these welfare gains.