Domestic time-of-use programs: Price differentials between on-peak and off-peak rates

Using data from Southern California Edison's Load Research system, this thesis estimates on-to-off peak price ratios for voluntary and mandatory residential time-of-use rates. Time-of-use rates are used to promote reduction in on-peak electricity usage. The price ratios are estimated using established voluntary and mandatory elasticities in a three stage model derived from an indirect utility function. The model uses the established elasticities to estimate price differentials for three peak usage reduction scenarios: 3%, 5% and 7%. The estimated ratios show that the current on-to-off peak price ratios used in Southern California Edison's residential time-of-use program are higher than necessary to reach their peak period reduction goals. This implies that the residential customers on a time-of-use rate may be experiencing unnecessarily high savings or losses.