Optimization of Customer Subscription Rates to Electric Utility Tariffs

In 2006 a test of residential electricity pricing using multiple tariffs was performed using a mixture of fixed-prices, time of-use prices and 5-minute real-time prices. Each tariff has advantages and disadvantages for both consumers and utilities. This paper examines a numerical optimization method to efficiently identify the optimal combination of customers to enroll under the available tariffs such that a utility can minimize the cost associated with both serving energy and the cost associated with the uncertainty of peak loads.