Electricity Retail Package Pricing Design Based on Analysis of User Selection Behavior

This paper proposes a pricing strategy of electricity retail packages that considers the fact that users have the autonomy to make decisions that optimize their own welfare. The users’ self-selection and strategic behaviors are taken into account in the strategy, and the retail packages with reasonable types and tariffs can be formulated for various user types, including industrial, commercial, and residential users. Firstly, the K-means algorithm is employed to cluster the load characteristic curves of users, generating various typical load characteristic curves. Moreover, a thorough analysis and modeling is conducted on the utility, self-selection and strategic behaviors of users. Then, the retailer model is developed consisting of its market share, electricity purchase cost and operational risk models in the retail market. Furthermore, taking practical limitations into account, the package pricing optimization model can be formulated with the objective of maximizing the retailer profit. Finally, the feasibility and effectiveness of the proposed package pricing strategy are validated through the calculation examples.