Facebook LinkedIn Twitter

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Pareto Dominance Through Self-Selecting Tariffs: The Case of TOU Electricity Rates for Agricultural Customers

We estimate the impact of a voluntary time-of-use (TOU) rate option for electricity used in agricultural pumping. We find that offering the TOU tariff in addition to standard, non-TOU rates increases the profits of the electric utility and Pareto dominates the offering of standard rates alone. The analysis provides an example of the fact that Pareto improvements can be obtained by judiciously expanding the set of self-selecting tariffs offered by a public utility.

Purchase ( $25 )

Energy Specializations: Electricity – Markets and Prices ; Electricity – Policy and Regulation

JEL Codes:
D42 - Market Structure, Pricing, and Design: Monopoly
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: TOU electricity rates, Agriculture, Self-selecting tariffs, Pareto dominance

DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No1-8

Published in Volume 10, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.