An Equilibrium Analysis of Time-Varying and Flat Electricity Rates

The methods identify the specific consumption distributions at which TOU or event-based are in energy- and cost-equilibrium with the domestic service tariff for residential customers. For the TOU structure, the analysis shows that customers must maintain a non-winter to winter-peak consumption ratio exceeding 3.0756 for cost neutrality, a condition rarely met by households with winter-dominant loads. In contrast, event-based structures require only minimal behavioral adjustments to achieve savings, with as little as 1.75% of annual consumption needing to be avoided during event periods to match domestic-service costs. Additional savings are observed with partial or full load shifting away from peak events. The findings highlight that while TOU may benefit households with high summer usage, event-based tariffs present a more practical and economically favorable option for residential customers living in the Canadian province of Nova Scotia. The paper concludes with implications for tariff selection and consumer behavior. This research will be of value to anyone considering designing a time-varying rate or having to choose between an existing flat rate tariff and a time-varying tariff.