Future of Utilities - Utilities of the Future

Chapter 13

Network Pricing for the Prosumer Future: Demand-Based Tariffs or Locational Marginal Pricing?

Darryl Biggar^*

Andrew Reeves^†*    Australian Competition and Consumer Commission, Melbourne, VIC, Australia^†    Former Chairman, Australian Energy Regulator, Hobart, Tasmania, Australia

Abstract

Under retail competition, retailers intermediate between the wholesale prices and the retail contracts offered to end-customers. Ideally, retailers would offer end-customers a range of retail contracts that balance the need to make efficient usage and investment decisions with the customer’s desire for insurance against pricing risks. This can be achieved where the wholesale prices are set efficiently, and where the retailers have access to the tools ...