A risk-evasion TOU pricing method for distribution utility in deregulated market environment

Distribution utilities are facing enormous risks in competitive market. Part of the risks comes from the different steps of comparatively fixed retail prices and unfixed wholesale prices. A time of use pricing method is presented in this paper to give customers right signals in wholesale market, thus encourage customers to manage their consuming behaviors and exactly respond for the change of electricity supply. Mathematical models of the new TOU pricing method are given and the optimal solutions are derived. The different types of participants, elasticity of load in the models are also discussed. The simulation results show that proposed pricing method is validated for reducing distribution utilities´ risks in market environment.