Development of time-of-use-tariffs

Abstract

The electricity consumption profile varies during any 24-hour period, but the electricity pricing policy for Lesotho Electricity Company (LEC) does not reflect this fluctuation as it employs flat-rate tariffs across all customer categories. This fails to adequately capture the costs exerted on the electricity network by each customer at a certain period. To address this problem, time-of-use (ToU) tariffs are determined in this study, while ensuring revenue neutrality for the utility before any load shifting. Implementation of a comprehensive ToU based pricing model could be an effective mechanism to reflect the costs imposed on the network by customers and therefore encourage customers to engage in load adjustment. The Gaussian mixture model has been utilized to determine ToU time-periods and prices. The time-periods are divided into different periods; off-peak, standard, and peak periods. Different customer categories have different durations of time- periods. This is attributed to the observed load profiles of different customer categories. Furthermore, different customer categories have different prices per period resulting in different price ratios. Possible load-shifting scenarios of 5% and 10% have resulted in a reduction in customer energy bills of 2.6% and 5.2%, respectively. While, the LEC bulk energy savings translated to 13 GWh and 30 GWh for the two load-shifting scenarios, respectively. Key words: