The authors respond to Roycroft’s reality check.
Lisa Wood is executive director of the Institute for Electric Efficiency, and Ahmad Faruqui is a principal with The Brattle Group. The authors acknowledge the research contributions of Sanem Sergici of the Brattle Group.
(This is a response to Low-Income Reality Check by Trevor R. Roycroft.)
Experience with time-of-use pricing programs shows that a large majority of low-income customers will benefit from dynamic prices. In fact, not making such prices available to these customers might be harmful. In the most efficient system, all customers will face the same prices—and policy makers can provide direct relief to ease the burden for low-income customers.
The impact of dynamic pricing on low-income consumers of electricity is of great import in regulatory policy. In our article, we used empirical information from several jurisdictions to arrive at some basic conclusions on A) whether or not low-income customers were likely to respond to dynamic pricing and B) even if they didn’t respond, would low-income consumers be made worse off by dynamic pricing.