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. Distributed generation
Prosumer?
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. Findings
Mild efficiency gains from time-varying pricing. Bellow 2 dollars per month per household.
Some households benefit up to ten time more than others, depending on their appliance stock and their geographic location.
Time-varying pricing improves the economics of renewable technologies. This can translate into meaningful emissions reductions.

6. Peak-load pricing
Price, cost
Quantity

7. Basic model

8. Flat rate t
Constraints

9. Time-of-Use t
Winter day
Summer day
Constraints

10. Real Time Pricing t
Day 1
Day 2
Day 3
No constraints

11. 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

12. 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

13. Long-run equilibrium: Heterogeneity

14. Long-run equilibrium: Generalized fees

15. 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

16. Aggregated efficiency gains15

17. Implications for different households
% of the population
% increase with respect to flat rate bill

18. On carbon emissions

19. Conclusions
Combining a top down with a bottom up approach can provide new insights for rate regulation policy.
Targeting different rates to different customers will likely be a better strategy than defaulting all households into Time-of-Use.
Good rate design can also help with climate change mitigation efforts.

20. Appendix

21. 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,

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

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

24. Economic parameters of generating technologies

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

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