A seasonal tariff for domestic supplies

Electricity and gas supplies are compared in the field of domestic heating services, showing that the former necessitates about twice as great an investment. Since they compete successfully, it is clear that electricity has compensating advantages, and tariffs should be aimed at exploiting these to the full instead of competing in the direct-heating field. Load factor is analysed into components, and a study is made of year-to-year load fluctuations. The nonindustrial fluctuations are isolated and correlated with the variations in degree days of heating requirements. The load fluctuations are expressed mathematically in the form of a fluctuation factor, which is an important element in demand-related costs. The history of the Clow Committee´s seasonal-tariff experiment and the reasons for its failure are briefly outlined. The proper purpose of a tariff differential is defined as an attempt to change the pattern of consumption and installation by changing the relative costs of various services. An example is given in which the cost of cooking and all-year water heating is reduced by 7% and that of summer water heating by 50%. The cost of space heating is increased by 22%, and the differential available for promoting offpeak heating is increased by 67%. Many years´ use of nondiscriminating domestic tariffs have saddled the industry with a load having an unplumbed weather hazard on a scale unparalleled elsewhere. Past estimates of costs and demand, based on annual load and diversity factors, have proved wrong, because, with this load, the diversity can suddenly drop. If future supplies are to be safeguarded, there must be substantial increases in the rate of investment, or a new alignment must be given to traditional tariff policies.