Load Control Under Curtailable Rates Both Customers and Power Companies Benefit

Abstract

Und er deregulation, power companies ar e looking at a variety of
new product option s, some of which involve curta ilabl e rat es. (The
wo rd " u tility" is not used in this articl e because incr easingly, po wer is
sold by a variety of c ompanie s, not all of them traditional ut ilities.)
U nde r a curtailable rate, the power compan y offers a di sc ount on the
pr ice of electricity, in return for the right to order a customer to r edu ce
its consump tion of power on sho rt not ice.
Such a rat e allows the power compan y to redu ce load und er sup-
pl y e mer gencies (less frequentl y, und er d istribution c onstraint s) or
w he n th e mar ginal cost of pow er exceeds the re venu e that w ill be
ea rn ed by continuing to supply all of the customers' demand s.
In add ition, deregulated power companies can use curtailable rates
to a ttrac t and keep cus tome rs by offering tar iffs closely matched to their
need s, and to react to spot market opportunities to buy and sell po wer.
Load s under a curtailable rate are effectively und er a d ispatcher 's con-
trol, so that the term "dis patchable" can also be used to describe these
load s.