We estimate the impact of a voluntary time-of-use (TOU) rale option for electricity used in agricultural pumping. We find that offering the TOU tariff in addition to standard, non-TOU rates increases the profits of the electric utility and Pareto dominates the offering of standard rates alone. The analysis provides an example of the fact that Pareto improvements can be obtained by Judiciously expanding the set of self-selecting tariffs offered by a public utility.
BullerO.NordinJ. (1984). “Cost-of-Electricity Savings for Rural Electric Cooperatives through Application of Load. Management and Time-of-Use Pricing to Their Members,” North Central Journal of Agricultural Economics, 6(2), pp. 108-116.
2.
CavesD.ChristensenL. (1980). “Econometric Analysis of Wisconsin Time-of-Use Electricity Experiments,” Journal of Econometrics, 14(3), pp. 287-306.
3.
CavesD.ChristensenL.HerrigesJ. (1984). “Modelling Alternative Residential Peak-Load Electricity Rate Structures,” Journal of Econometrics, 14(2), pp. 249-268.
4.
CavesD.HerrigesJ.KirschL. (1987). “Voluntary Time-of-Use Ratesand Involuntary Revenue Erosion,” working paper.
5.
ChungC.AignerD. (1981). “Industrial and Commercial Demand for Electricity by Time-of-Day: A California Case Study,” The Energy Journal, 2(3), pp. 91-110.
6.
CraggJ. (1971). “Some Statistical Modelsfor Limited Dependent Variables with Application to the Demand for Durable Goods,” Econometrica, 39, pp. 829-844.
7.
FaulhaberG.PanzarJ. (1977). “Optimal Two Part Tariffs with Self-Selection,” Bell Laboratories Economic Discussion Paper No. 74.
8.
HeckmanJ. (1978). “Dummy Endogenous Variables in Simultaneous Equation Systems,” Econometrica, 46, pp. 931-959.
9.
HeckmanJ. (1979). “Sample Selection Bias as a Specification Error,”Econometrica, 47, pp. 153-162.
10.
HirschbergJ.AignerD. (1983). “An Analysis of Commercial and Industrial Customer Response to Time-of-Use Rates,” The Energy Journal, 4, Special Electricity Issue, pp. 103-126.
11.
LawrenceA., ed. (1977). Forecasting and Modeling Time-of-Day and Seasonal Electricity Demands, Electric Power Research Institute, Report EA578-ST, Palo Alto, CA.
12.
LawrenceA.AignerD., eds. (1979). Modeling and Forecasting Time-of-Day and Seasonal Electricity Demands, special issue of Journal of Econometrics, 9, Nos. 1-2.
13.
LeeL. (1981). “Simultaneous Equations Models with Discrete and Censored Dependent Variables,” in ManskiC.McFaddenD. eds., Structural Analysis of Discrete Data with Econometric Applications, Cambridge: MIT Press.
MaddiganR.ChernW.RizyC. (1982). “The irrigation Demand for Electricity,” American Journal of Agricultural Economics, 64, pp. 673-680.
16.
McFaddenD. (1973). “Conditional Logit Analysis of Qualitative Choice Behavior,” in ZarembkaP., ed. Frontiers in Econometrics, New York: Academic Press.
17.
McFaddenD. (1981). “Econometric Models of Probabilistic Choice,” in ManskiC.McFaddenD., eds., Structural Analysis of Discrete Data with Econometric Applications, Cambridge: MIT Press.
18.
Pacific Gas and Electric Company (1985a). “Application 82-03-26, Decision 82-12-120, Response to Ordering Paragraph 12(b),” before the California Public Utilities Commission, San Francisco, CA.
19.
Pacific Gas and Electric Company (1985b). “Co-Generation and Small Power Production Quarterly Report to the California Public Utilities Commission,” First Quarter 1985, San Francisco, CA.
20.
SchwartzP. (1984). “The Estimated Effects on Industry of Time-of-Day Demand and Energy Electricity Prices,” Journal of Industrial Economics, 22(4), pp. 523-539.
21.
TaylorT.SchwartzP. (1986). “A Residential Demand Charge: Evidence from the Duke Power Time-of-Day Pricing Experiment,” The Energy Journal, 7(2), pp. 135-151.
22.
TobinJ. (1958). “Estimation of Relationships for Limited Dependent Variables,” Econometrica, 26, pp. 24-36.
23.
TrainK. (1986). Qualitative Choice Analysis, Cambridge: MIT Press.
24.
TrainK. (1988). “Pareto Superior Voluntary Time-of-Use Prices.” Graduate School of Public Policy Working Paper Number 154, University of California, Berkeley.
25.
TrainK.BenM. AkivaAthertonT. (1989). “Consumption Patterns and SelfSelecting Tariffs,” Review of Economics and Statistics, forthcoming.
26.
WilligR. (1978). “Pareto-Superior Nonlinear Outlay Schedules,” Bell Journal of Economics, 9, pp. 56-69.
27.
WooC.K. (1985). “Demand for Electricity of Small Nonresidential Customers under Time- of-Use (TOU) Pricing,” The Energy Journal, 6(4), pp. 115-127.