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Household Response to Dynamic Pricing of Electricity: A Survey of the Experimental Evidence

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Ahmad Faruqui, Sanem Sergici
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This report surveys evidence from 15 recent experiments with dynamic pricing of electricity in the United States and Canada. The report presents evidence that households respond to higher prices by lowering usage. The magnitude of price response depends on several factors, such as the magnitude of the price increase, the presence of central air conditioning, the availability of enabling technologies such as two-way programmable communicating thermostats and always-on gateway systems that allow end-uses to be controlled remotely.