The Hopkinson tariff alternative to TOU rates in the Israel Electric Corporation

This paper determines three alternative Hopkinson tariffs to replace the Israel Electric Corporation's time-of-use (TOU) energy rate. The first apportions any system residual revenue requirement between customer classes, based on their respective historic peak demands. The second collects the same revenue as the current TOU rates. The third allocates generation revenue requirements for base-load and peaking generation plants in proportion to the base-load and peak-period energy consumption of each class, and allocates transmission and distribution revenue requirements in proportion to the connected load of each class. We show that a Hopkinson tariff with demand subscription is an attractive alternative to TOU rates, especially when quantity rationing is essential to maintaining a balance between the provision of energy and the demand for it. Copyright © 2002 John Wiley & Sons, Ltd.

[1]  Chi-Keung Woo,et al.  Reliability Differentiation of Electricity Transmission , 1998 .

[2]  P. Joskow.  Restructuring, Competition and Regulatory Reform in the U.S. Electricity Sector , 1997 .

[3]  Dewey Seeto,et al.  Time-of-use rates vs. Hopkinson tariffs redux: an analysis of the choice of rate structures in a regulated electricity distribution company , 1997 .

[4]  Greg Ball,et al.  Integrated Local Transmission and Distribution Planning Using Customer Outage Costs , 1997 .

[5]  Chi-Keung Woo,et al.  Case study: Targeting demand‐side management for electricity transmission and distribution benefits , 1994 .

[6]  Daniel F. Spulber.  OPTIMAL NONLINEAR PRICING AND CONTINGENT CONTRACTS , 1992 .

[7]  W. Hogan.  Contract networks for electric power transmission , 1992 .

[8]  Chi-Keung Woo,et al.  Capacity Rationing and Fixed Cost Collection , 1991 .

[9]  Chi-Keung Woo,et al.  Efficient electricity pricing with self-rationing , 1990 .

[10]  F. Schweppe,et al.  Optimal Pricing in Electrical Networks over Space and Time , 1984 .

[11]  J. Acton.  An Evaluation of Economists' Influence on Electric Utility Rate Reforms , 1982 .

[12]  J. D. Graaff,et al.  Theoretical welfare economics , 1957 .

[13]  Daniel F. Spulber.  Regulation and markets , 1989 .

[14]  Robert Wilson,et al.  Priority Service: Pricing, Investment, and Market Organization , 1987 .

[15]  H. Chao.  Peak Load Pricing and Capacity Planning with Demand and Supply Uncertainty , 1983 .

[16]  Benjamin Avi-Itzhak,et al.  Variable Load Pricing in the Face of Loss of Load Probability , 1977 .

[17]  Paul L. Joskow,et al.  Contributions to the Theory of Marginal Cost Pricing , 1976 .

[18]  M. A. Crew,et al.  Peak Load Pricing with a Diverse Technology , 1976 .