Residential winter kWÂ h responsiveness under optional time-varying pricing in British Columbia

A large sample of daily electricity consumption and pricing data are available from a pilot study conducted by BC Hydro in British Columbia (Canada) of its residential customers under optional time-varying pricing and remotely-activated load-control devices for the four winter months of November 2007-February 2008. We use those data to estimate the elasticity of substitution σ, defined as the negative of the percentage change in the peak-to-off-peak kW h ratio due to a 1% change in the peak-to-off-peak price ratio. Our estimates of σ characterize residential price responsiveness with and without load control during cold-weather months. While the estimates of σ sans load control are highly statistically significant (α = 0.01), they are less than 0.07. With load control in place, however, these σ estimates more than triple. Finally, we show that time-varying pricing sans load control causes a peak kW h reduction of 2.6% at the 2:1 peak-to-off-peak price ratio to 9.2% at the 12:1 peak-to-off-peak price ratio. Load control raises these reduction estimates to 9.2% and 30.7%.