01567nas a2200133   4500008004100000245010500041210006900146260000900215520103100224653001701255100002001272700001901292856012201311       2022                        eng d00aThe Impact of heterogeneity in consumer characteristics on the design of optimal time-of-use tariffs0 aImpact of heterogeneity in consumer characteristics on the desig  c20223 aUnlike commercial and industrial sectors where they have been successfully deployed, the rollout of voluntary Time-of-Use (TOU) tariffs in the residential sector has been tepid. One cause for this limited penetration of TOU tariffs in the residential sector is the difficulty in offering appropriate price incentives to a consumer class that is heterogeneous in its demographics and preferences. In this paper, we develop a parsimonious game-theoretic model to shed light on the optimal pricing problem from the utility's perspective when its consumers vary in their electricity consumption scheduling preferences as well as their willingness or flexibility to shift consumption in response to price incentives offered by the utility. Using this model, we generate structural insights into the role of the two types of consumer heterogeneity on the design and potential of voluntary TOU tariffs. We also show how our model and insights can be used to evaluate the current state and potential of TOU tariffs in two U.S. states.10aSupply Chain1 aMurali, Karthik1 aChoi, Dong, Gu  uhttps://business.oregonstate.edu/biblio/impact-heterogeneity-consumer-characteristics-design-optimal-time-use-tariffs01514nas a2200145   4500008004100000245010500041210006900146260000900215490000800224520103100232653001701263100002001280700001901300856004901319       2022                        eng d00aThe Impact of heterogeneity in consumer characteristics on the design of optimal time-of-use tariffs0 aImpact of heterogeneity in consumer characteristics on the desig  c20220 v2543 aUnlike commercial and industrial sectors where they have been successfully deployed, the rollout of voluntary Time-of-Use (TOU) tariffs in the residential sector has been tepid. One cause for this limited penetration of TOU tariffs in the residential sector is the difficulty in offering appropriate price incentives to a consumer class that is heterogeneous in its demographics and preferences. In this paper, we develop a parsimonious game-theoretic model to shed light on the optimal pricing problem from the utility's perspective when its consumers vary in their electricity consumption scheduling preferences as well as their willingness or flexibility to shift consumption in response to price incentives offered by the utility. Using this model, we generate structural insights into the role of the two types of consumer heterogeneity on the design and potential of voluntary TOU tariffs. We also show how our model and insights can be used to evaluate the current state and potential of TOU tariffs in two U.S. states.10aSupply Chain1 aMurali, Karthik1 aChoi, Dong, Gu  uhttps://doi.org/10.1016/j.energy.2022.12424802173nas a2200181   4500008004100000245008300041210006900124260000900193300001200202490000700214520163300221653001701854100002001871700001901891700002201910700002001932856003901952       2020                        eng d00aWhy have Voluntary Time-of-Use Tariffs Fallen Short in the Residential Sector?0 aWhy have Voluntary TimeofUse Tariffs Fallen Short in the Residen  c2020  a617-6420 v293 aWe investigate the causes behind the underwhelming adoption of voluntary Time-of-Use (TOU) tariffs in the residential electricity market. TOU tariffs are deployed by utilities to better match electricity generation capacity with market demand by giving consumers price incentives to reduce their consumption when electricity demand is at its peak. However, consumers in residential electricity markets are heterogeneous in their consumption preferences. Hence, utilities face a trade-off when deploying voluntary TOU tariffs---to provide aggressive price incentives that will only appeal to consumers with flatter profiles or milder incentives to appeal to a larger proportion of the market. Using a game-theoretic model, we identify the key factors that determine the viability of voluntary TOU tariff deployment. On the supply side, the gap between wholesale prices in the peak and off-peak periods determines how much the utility stands to benefit by inducing demand response. On the demand side, heterogeneity within target consumer sets determines how much demand response the utility can induce with a certain price incentive. We show that misaligned incentives between utilities and regulators lead to underwhelming TOU tariff adoption compared to the socially desirable level, and that this under-adoption is worse when consumption preferences are uniformly distributed. We also evaluate the degree of cross-subsidization across tariff structures to identify their implications for equity among the different consumer types, and find that low levels of voluntary TOU adoption are less equitable than the default tariffs.10aSupply Chain1 aMurali, Karthik1 aChoi, Dong, Gu1 aLim, Michael, Kim1 aThomas, Valerie  uhttps://doi.org/10.1111/poms.1312602203nas a2200157   4500008004100000245008300041210006900124260000900193520163300202653001701835100002001852700001901872700002201891700002001913856011201933       2019                        eng d00aWhy have Voluntary Time-of-Use Tariffs Fallen Short in the Residential Sector?0 aWhy have Voluntary TimeofUse Tariffs Fallen Short in the Residen  c20193 aWe investigate the causes behind the underwhelming adoption of voluntary Time-of-Use (TOU) tariffs in the residential electricity market. TOU tariffs are deployed by utilities to better match electricity generation capacity with market demand by giving consumers price incentives to reduce their consumption when electricity demand is at its peak. However, consumers in residential electricity markets are heterogeneous in their consumption preferences. Hence, utilities face a trade-off when deploying voluntary TOU tariffs---to provide aggressive price incentives that will only appeal to consumers with flatter profiles or milder incentives to appeal to a larger proportion of the market. Using a game-theoretic model, we identify the key factors that determine the viability of voluntary TOU tariff deployment. On the supply side, the gap between wholesale prices in the peak and off-peak periods determines how much the utility stands to benefit by inducing demand response. On the demand side, heterogeneity within target consumer sets determines how much demand response the utility can induce with a certain price incentive. We show that misaligned incentives between utilities and regulators lead to underwhelming TOU tariff adoption compared to the socially desirable level, and that this under-adoption is worse when consumption preferences are uniformly distributed. We also evaluate the degree of cross-subsidization across tariff structures to identify their implications for equity among the different consumer types, and find that low levels of voluntary TOU adoption are less equitable than the default tariffs.10aSupply Chain1 aMurali, Karthik1 aChoi, Dong, Gu1 aLim, Michael, Kim1 aThomas, Valerie  uhttps://business.oregonstate.edu/biblio/why-have-voluntary-time-use-tariffs-fallen-short-residential-sector