Are residential time-of-use prices only effective for middle
class households, or do low-income customers benefit too—as
authors Lisa Wood and Ahmad Faruqui asserted in their October
2010 article... Dynamic Pricing and Low-Income Customers
Correcting misconceptions about load-management programs.
Studies are showing that dynamic electricity pricing—where
prices vary based on system conditions, rising during critical
periods for a few hours each year and falling during all other
times—can benefit both customers and electric utilities alike.
By encouraging customers to shift some of their demand on those
critical days to off-peak hours, the higher peak prices can help
utilities to defer the need for building additional capacity.
And the lower off-peak prices represent a savings for consumers
over their regular electric rate. But how does dynamic pricing
affect low-income customers who often are regarded as
vulnerable? Different viewpoints yield different answers. 1 One
school of thought is that low-income custo