Incorporating time-varying electricity rates into day-ahead distribution system operation

This paper proposes an operation framework for incorporating time-varying electricity rates into day-ahead distribution system operation. The day-ahead distribution system operation problem is formulated as a mixed-integer linear programming (MILP) model, in which profit of the distribution system operator (DSO) from serving local loads is maximized. The impact of time-varying electricity rates on local loads is determined based on the estimated price elasticity of the customers and the historical consumption data. The customers´ consumption behaviors in the absence of time-varying electricity rates are captured in terms of the customer baseline load (CBL). The proposed model is applied to a 33-bus distribution system. Numerous studies are conducted in order to analyze the impacts of incorporating time-of-use (TOU), critical peak pricing (CPP), and real-time pricing (RTP) on the operation decisions, load profile, profit of distribution system operator (DSO), and customers´ bill.