Does Price Volatility Information Affect Consumer Choice?
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Date
2022-01
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Mosbacher Institute for Trade, Economics & Public Policy
Abstract
Description
Most electricity consumers in the United States purchase electricity through a fixed-rate plan. This leads to inefficiencies and overuse because there are no monetary incentives for consumers to limit usage during peak times when electricity generation is very expensive. The reliance on fixed-rate plans makes electricity generation inefficient and has negative environmental implications. Neither utilities nor policy makers have been able to figure out how to successfully introduce dynamic-rate pricing plans on a large scale. Our research suggests ways electric utilities can help consumers make more efficient choices.
Keywords
electricity pricing, efficiency