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Designing Pareto optimal electricity retail rates when utility customers are prosumers

Title data

Saumweber, Andrea ; Wederhake, Lars ; Cardoso, Gonçalo ; Fridgen, Gilbert ; Heleno, Miguel:
Designing Pareto optimal electricity retail rates when utility customers are prosumers.
In: Energy Policy. Vol. 156 (September 2021) . - No. 112339.
ISSN 0301-4215
DOI: https://doi.org/10.1016/j.enpol.2021.112339

Official URL: Volltext

Project information

Project title:
Project's official titleProject's id
Projektgruppe WI Künstliche IntelligenzNo information
Projektgruppe WI Nachhaltiges Energiemanagement & MobilitätNo information

Abstract in another language

Electric retail rate design is relevant to utilities, customers, and regulators as retail rates impact the utility’s revenue as well as the customers’ electricity bills. In California, regulators approve rate proposals by privately owned vertical integrated utilities. Approval, however, is subject to compliance with multiple, potentially conflicting objectives such as economic or environmental objectives. Additionally, retail rates are price signals that affect how customers use electricity services. When utility customers change their usage, they also impact the ratemaking objectives to which rates have been designed. This suggests a feedback loop, which is particularly pronounced with prosumers, as they can systematically optimize their interactions with the electricity system. Prevalent ratemaking methods may not deliver retail rates that are optimal for multiple objectives when customers are prosumers. We propose a novel ratemaking method that formalizes the problem of designing retail rates as a multi-criteria optimization problem and accounts for prosumer reactions through a simulation-based optimization approach. Through a fictive case study, we found that the resulting Pareto frontiers are useful in recognizing and balancing tradeoffs among conflicting ratemaking objectives. Additionally, our results indicate that prevailing retail rates in California are not Pareto optimal.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Ratemaking; Rate case; Prosumer; Utility; DER-CAM; Pareto optimization
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Former Professors > Professor Information Systems and Sustainable IT Management - Univ.-Prof. Dr. Gilbert Fridgen
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration XVII - Information Systems and Value-Based Business Process Management
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration XVII - Information Systems and Value-Based Business Process Management > Chair Information Systems and Value-Based Business Process Management - Univ.-Prof. Dr. Maximilian Röglinger
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 25 May 2022 07:36
Last Modified: 25 May 2022 07:36
URI: https://eref.uni-bayreuth.de/id/eprint/69762