Behavior Modification

This article describes how retail electricity demand can be made price-responsive through either dynamic, time-based retail pricing or DR programs offered by utilities and/or regional ISOs. PRD can provide the crucial link between wholesale and retail electricity markets that is missing under traditional fixed retail rates. Parties generally agree on the need for greater PRD to improve the efficiency of wholesale power markets. There is no mechanical formula for determining how much consumers will alter their usage patterns for any given event. Price response varies considerably across customers and it tends to be greater for customers with relatively high usage levels. Consumers can choose to save money by reducing consumption during periods of high prices or "buy through" at prices that reflect wholesale market conditions.