Households significantly reduce electricity use when prices rise

A new study in the RAND Journal of Economics examined how quickly households change their electricity use when prices rise and fall rapidly. Results show that when electricity prices increase, the average household rapidly reduces its electricity use. However, when electricity prices then decrease, household energy use returns to previous levels.

Matthew White and Peter C. Reiss examined how thousands of households in California changed their energy use before and after California's electricity crisis. These households experienced unprecedented price increases in 2000. As opposed to self-reports, researchers used metered energy consumption for 70,000 households.

When electricity prices doubled, the average household reduced its electricity use by about 13 percent within 60 days. More than one third of all households reduced their monthly electricity use by over 20 percent.

When electricity prices later decreased, energy use rebounded to nearly previous levels within about a month.

Households also conserve energy in response to public informational campaigns about how to lower one's electric bill. The researchers found that publicly-funded programs delivered changes in home energy use that could add up to a big difference in total electricity use across a city or state.

Overall, these informational programs were remarkably effective, reducing average household energy use by about 7 percent.

Source: Wiley

   

• GrayMouser - Oct 29, 2008
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  Duh?
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• lengould100 - Oct 30, 2008
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  A waste of time. Total energy use information is of no real use to system planners, what they need is peak energy use information. The amount of generation equipment required in a region is totally dependent on peak use, not total use. For most systems, the customer's bills are far more a factor of total equipment capacity installed than on total energy used, esp. in areas where nuclear, coal and hydro generation are large factors.
  
  Only problem is, without a really smart metering and communications system (Not the present dumb AMI systems designed only to read meters once per month), that information is just not available on any useful granularity for this sort of study.
  
  We need to start sobbying our regulators for a system such as IMEUC, see papers at EnergyPulse.net.
  
  Independent Market for Every Utility Customer - Preliminary Business Case
  http://www.energy..._id=1176
  
  Independent Market for Every Utility Customer - Part 2 - Market Operation
  http://www.energy..._id=1181
  
  Independent Market for Every Utility Customer - Part 3 - Alternative Market Operation
  http://www.energy..._id=1811
  
  Energy Central Blogs - IMEUC - Independent Market for Every Utility Customer
  http://www.energy...oduction
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