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On the Inequity of Flat-rate Electricity Tariffs

Paul Simshauser and David Downer

Year: 2016
Volume: Volume 37
Number: Number 3
DOI: 10.5547/01956574.37.3.psim
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Abstract:
Proposals to reform default 'flat-rate' electricity tariffs are rarely met with enthusiasm by consumer groups or policymakers because they produce winners and losers. Proposals to initiate more cost-reflective time-of-use rates will be met with cautious interest if the basis of customer participation is 'opt-in'. Using the smart meter data of 160,000 residential customers from the Victorian region of Australia's National Electricity Market, our tariff model reveals that households in financial hardship are the most adversely affected from existing flat-rate structures. Even after network tariff rebalancing, Hardship and Concession & Pensioner Households are, on average, beneficiaries of more cost-reflective tariff structures once Demand Response is accounted for.





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