The design of optional two-part tariff for electricity transmission and distribution service based on the load factor

Power consumers don’t pay network access tariff in China currently, and proportion of capacity cost for transmission and distribution service recovered by fixed charges is relatively low in the existing two-part tariff, which both might lead to difficulty to recycle the cost. This paper uses the Bary curve to explain the relationship of load factor and coincident factor and its application in the allocation of capacity cost for users whose load factors are quite different. Based on the clustering of users by K-means algorithm according to their load factors, the parameter of Bary curve is estimated, and the allocation ratios of capacity cost between fixed charges and running charges are determined by drawing tangent lines to the curve for each user group. According to the allocation ratios, two-part tariff combinations for different load factors users can be obtained. Taking 10KV users as an example, an empirical analysis shows the rationality and feasibility of the model. The design of optional two-part tariff combinations can improve the allocation of capacity cost, and the users can achieve economic efficiency and fairness by matching their load factor, thereby elevate the coefficient of utilization of electricity equipment and cut down or put off the investment for power grid.