Improving time-of-use electricity pricing in Ontario

Abstract

Time-of-Use (ToU) electricity pricing is an electricity pricing scheme where consumers are charged at a rate that is dependent on the time of electricity consumption. This pricing scheme is often implemented to match the cost of generating and supplying electricity, and to make consumers defer appliance usage; this would reduce the daily electricity consumption peak that can both reduce the cost of generation and carbon footprints. We first critique the current ToU scheme in Ontario and make recommendations to improve it. Subsequently, we create an Agent-Based Model (ABM) to study ToU pricing and its effectiveness in reducing peak loads, which allows us to evaluate the benefit of our recommendations. We find that while ToU is effective in incentivizing load deferral, improvements can be made in the Ontario ToU scheme.