Incorporating time-varying electricity rates into day-ahead distribution system operation

This paper proposes an operation framework for incorporating time-varying electricity rates into day-ahead distribution system operation. The day-ahead distribution system operation problem is formulated as a mixed-integer linear programming (MILP) model, in which profit of the distribution system operator (DSO) from serving local loads is maximized. The impact of time-varying electricity rates on local loads is determined based on the estimated price elasticity of the customers and the historical consumption data. The customers' consumption behaviors in the absence of time-varying electricity rates are captured in terms of the customer baseline load (CBL). The proposed model is applied to a 33-bus distribution system. Numerous studies are conducted in order to analyze the impacts of incorporating time-of-use (TOU), critical peak pricing (CPP), and real-time pricing (RTP) on the operation decisions, load profile, profit of distribution system operator (DSO), and customers' bill.