Incorporating Two-Part Real-Time Pricing Scheme into Distribution System Operation

Existing real-time pricing (RTP) schemes charge the whole customer's consumption at one highly volatile time varying price, which, in turn, imposes financial risk to participating customers. This paper presents a two-part RTP scheme aiming at efficient distribution system operation while mitigating customers' risk level imposed by volatile RTP prices. Our proposed RTP scheme offers two different RTP price signals. The first RTP price signal is used to charge customer's consumption up to its customer baseline load (CBL) which presents customer's consumption in the absence of RTP signals. The second RTP price signal is announced a day ahead of the actual operation, and can be updated in real time by distribution system operator (DSO) with a short notice. In our proposed two-part RTP scheme, only the deviations of customer's consumption from its CBL are charged at the day ahead volatile RTP price signal. Customers' load profile under the proposed RTP scheme is modeled based on customers' estimated price elasticity. An operation framework is also proposed to integrate the proposed RTP scheme into operation of distribution system. The superiority of our proposed two part RTP scheme is demonstrated using various studies conducted on a 33-bus distribution feeder.