Nonlinear pricing has recently become a subject of intense research in utility pricing. This research begins with the work on multipart tariffs which points out the superiority of nonlinear pricing over linear pricing and the importance of self-selection in regulatory pricing (see e.g., Brown and Sibley (1986), Faulhaber and Panzar (1977), Willig (1978) and Mirman and Sibley (1980)). That is, by providing a menu of rate options from which a ratepayer chooses what he most prefers, the utility and the ratepayers are both better off than when only one linear rate schedule is available (e.g., a non-time differentiated energy charge).
ActonJ. P.McKayD. (1983). Quantitative Aspects of Industrial Use of Electricity under Time-of-Use Rates in France, England, and Wales. Report R-3010-EPRI/HF/RC (Santa Monica: Rand).
2.
BrownS. J.SibleyD. S. (1986). The Theory of Public Utility Pricing (London: Cambridge)
ChaoH. P., (1987). “Multilevel Demand Subscription Service for Electric Power,” Energy Economics (April).
5.
ChungC.AignerD. J. (1981). “Industrial and Commercial Demand for Electricity by Time-of-Day: A California Study.” The Energy Journal2:3, 91-110.
6.
FaulhaberG. R.PanzarJ. C. (1977). “Optimal two part tariffs with self-selection.” Bell Laboratories Discussion Paper No. 74.
7.
HendersonS. J. (1986). “Price Discrimination Limits in Relation to the Death Spiral.” The Energy Journal7: 3. 33-50.
8.
HirschbergJ. G.AignerD. J. (1983). “An Analysis of Commercial and Industrial Customer Response lo Time-of-Use Rates.” The Energy Journal4 (Special Electricity Issue). 103-126.
9.
MinnanL. I., (1985). “Supportability, Sustainability and Subsidy-Free Prices.” Rand Journal of Economics16: 1, 114-126.
10.
MirmanL. J.SibleyD. S. (1980). “Optimal Nonlinear Prices for Multiproduct Monopolies.” Bell Journal of Economics11: 2, 659-70.
11.
OrdoverI. A.PanrarI. C. (1980). “On the Existence of Pareto Superior Outlay Schedules.” Bell Journal of Economics11:1, 351-4.
12.
PG&E (1986). Advice No. 1126-E submitted to the California Public Utilities Commission, October 6, 1986.
13.
PanzarJ. C.SibleyD. S. (1978). “Public Utility Pricing Under Risk the Case of Self-Rationing,” American Economic Review68: 3, 888-95.
14.
WilligR. D. (1978). “Pareto Superior Nonlinear Outlay Schedules.” Bell Journal of Economics9: 1, 56-69.
15.
WooC. K. (1987). “Fixed Cost Recovery under Competition in Electricity Pricing.” Energy Journal: Proceedings of the 8th (1986) IAEE Conference at MIT, Cambridge.
16.
WooC. K.ToyamaN. (1986). “Service Reliability and the Optimal Interruptible Rate Option in Residential Electricity Pricing.” Energy Journal7:3, 123-136.
