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An Exploratory Analysis of California Residential Customer Response to Critical Peak Pricing of Electricity

Publication Type:

Journal Article


Energy, p.32-34 (2007)



Critical peak pricing, Demand response, Electricity pricing, Load response, Residential electricity


This paper summarizes the results from an exploratory analysis of residential customer response to a critical peak pricing (CPP) experiment in California, in which 15 times per year participating customers received high price signals dispatched by a local electricity distribution company. The high prices were about three times the on-peak price for the otherwise applicable time-of-use rate. Using hourly load data collected during the 15-month experiment, we find statistically significant load reduction for participants both with and without automated end-use control technologies. During 5-h critical peak periods, participants without control technology used up to 13% less energy than they did during normal peak periods. Participants equipped with programmable communicating thermostats used 25% and 41% less for 5 and 2 h critical events, respectively. Thus, this paper offers convincing evidence that the residential sector can provide substantial contributions to retail demand response, which is considered a potential tool for mitigating market power, stabilizing wholesale market prices, managing system reliability, and maintaining system resource adequacy.