TY - JOUR
T1 - Priority pricing in electricity supply
T2 - An application for Israel
AU - Beenstock, Michael
AU - Goldin, Ephraim
PY - 1997/8
Y1 - 1997/8
N2 - It is well known that in the event of a shortage in generation capacity, it is inefficient if the electricity utility cuts off customers randomly. It is preferable to set up a market in service priority in which customers who have a greater need pay more for the right not to be cut off. We use an econometric model of outage costs in Israel to calculate the menu of priority rates by season and time of day. Top priority rates range from zero, when the loss-of-load probability (LOLP) is zero, to 8 cents (US) per kWh when the LOLP is greatest.
AB - It is well known that in the event of a shortage in generation capacity, it is inefficient if the electricity utility cuts off customers randomly. It is preferable to set up a market in service priority in which customers who have a greater need pay more for the right not to be cut off. We use an econometric model of outage costs in Israel to calculate the menu of priority rates by season and time of day. Top priority rates range from zero, when the loss-of-load probability (LOLP) is zero, to 8 cents (US) per kWh when the LOLP is greatest.
KW - Non-linear pricing
KW - Outages
KW - Service priority
UR - http://www.scopus.com/inward/record.url?scp=0031204303&partnerID=8YFLogxK
U2 - 10.1016/s0928-7655(96)00017-6
DO - 10.1016/s0928-7655(96)00017-6
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AN - SCOPUS:0031204303
SN - 0928-7655
VL - 19
SP - 175
EP - 189
JO - Resource and Energy Economics
JF - Resource and Energy Economics
IS - 3
ER -