Understanding Why Utilities Are Moving Towards Residential Demand Pricing and Analyzing Effectiveness in Methods of Communication

An increasing amount of utilities are moving towards residential demand pricing, causing much controversy and miscommunication between the provider and the consumer as to what demand pricing is, and what it entails for the consumer. This paper will analyze the effectiveness of utility-consumer communication methods and how Arizona utility companies (Salt River Project and Arizona Public Service) have migrated the obstacles of TOU (Time of Use) pricing changes to Arizona utility residents, especially to solar customers. SRP (Salt River Project) and APS (Arizona Public Service) have both implemented pilot programs including the E-27 for SRP and the Saver Choice Plus plan for APS . Both programs, along with international programs, have seen varying levels of success for their business and for consumers to grasp peak-demand pricing and usage. Overall, APS customers have seen an average increase of 4.5% on their electricity bills while SRP customers have experienced, on average, a $19.00 increase. Despite these bill increases, both utilities have seen a decrease in customer electricity demand in response to higher energy costs during peak times.