Date on Master's Thesis/Doctoral Dissertation


Document Type

Doctoral Dissertation

Degree Name

Ph. D.


Industrial Engineering

Degree Program

Industrial Engineering, PhD

Committee Chair

Bai, Lihui

Committee Co-Chair (if applicable)

Evans, Gerald

Committee Member

Evans, Gerald

Committee Member

Alexander, Suraj

Committee Member

McIntyre, Michael

Author's Keywords

demand response; multi attribute utility; model predictive control; simulation; demand charge; dynamic pricing


Energy efficiency in the electricity distribution system continues to gain importance as demand for electricity keeps rising and resources keep diminishing. Achieving higher energy efficiency by implementing control strategies and demand response (DR) programs has always been a topic of interest in the electric utility industry. The advent of smart grids with enhanced data communication capabilities propels DR to be an essential part of the next generation power distribution system. Fundamentally, DR has the ability to charge a customer the true price of electricity at the time of use, and the general perception is that consumers would shift their load to a cheaper off-peak period. Consequently, when designing incentives most DR literature assumes consumers always minimize total electricity cost when facing energy consumption decisions. However, in practice, it has been shown that customers often override financial incentives if they feel strongly about the inconvenience of load-shifting arrangements. In this dissertation, an energy consumption model based on consumers‟ response to both cost and convenience/comfort is proposed in studying the effects of differential pricing mechanisms. We use multi-attribute utility functions and a model predictive control mechanism to simulate consumer behavior of using non-thermostatic loads vi (prototypical home appliances) and thermostatically controlled load (HVAC). The distributed behavior patterns caused by risk nature, thermal preferences, household size, etc. are all incorporated using an object-oriented simulation model to represent a typical residential population. The simulation based optimization platform thus developed is used to study various types of pricing mechanisms including static and dynamic variable pricing. There are many electric utilities that have applied differential pricing structures to influence consumer behavior. However, majority of current DR practices include static variable pricings, since consumer response to dynamic prices is very difficult to predict. We also study a novel pricing method using demand charge on coincident load. Such a pricing model is based on consumers‟ individual contribution to the monthly system peak, which is highly stochastic. We propose to use the conditional Markov chain to calculate the probability that the system will reach a peak, and subsequently simulate consumers‟ behavior in response to that peak. Sensitivity analysis and comparisons of various rate structures are done using simulation. Overall, this dissertation provides a simulation model to study electricity consumers‟ response to DR programs and various rate structures, and thus can be used to guide the design of optimal pricing mechanism in demand side management.