Time of Use pricing - India, a case study

As electricity markets are liberalized, consumers become exposed to higher electricity prices and may decide to modify their demand to reduce their electricity costs. Real Time Pricing (RTP) and Time of Use pricing (TOU) function as load management tools. The magnitude variation of price (for e.g., the diurnal, weekly or seasonal) would require setting up of a model to represent consumer behavior. The model relies on the concept of demand elasticity across time, degree of consumer economic rationality and, on the supply side, on the price formulation model. A range of assumptions in respect of these matters are explored. In this paper the MSEDCL system is analyzed to check demand elasticity. It shall be done in two parts viz; (a) within the existing time slots, the TOU rates to be modified based on Cost of Unserved Energy (CUE) , (b) With the existing tariff the time slots to be varied and its implications to be analyzed based on the Cost of Service (COS) study, (c)A new tariff proposed based on COS and CUE to decide peak hour tariff.