The theory of maximum kW demand charges for electricity |
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Authors: | Sandford V Berg Andreas Savvides |
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Affiliation: | Public Utility Research Center, College of Business Administration, University of Florida, Gainesville, FL 32611, USA |
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Abstract: | The kilowatt (kW) demand charge characterizes most electricity price schedules for industrial customers, yet it has not been analysed thoroughly (compared with time-of-use rates). This article shows how such charges complicate interpretations of past estimates of the industrial demand for electricity. Using a utility maximization (cost minimization) model, we derive consistent demand curves, which are shown potentially to be subject to discontinuities. |
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Keywords: | Electricity Pricing Industrial |
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