Peaking Interest: How awareness drives the effectiveness of time-of-use electricity pricing

Transcription

1 Peaking Interest: How awareness drives the effectiveness of time-of-use electricity pricing Brian C. Prest Ph.D. Candidate, Duke University USAEE 2017 Annual Conference November 13, 2017

2 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours

3 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours Goal: reduce costs associated with timing of load Investment in peaker power plants Managing intermittent renewables (without expensive battery storage)

4 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours Goal: reduce costs associated with timing of load Investment in peaker power plants Managing intermittent renewables (without expensive battery storage) Literature shows consumers do respond, but only modestly Why?

5 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours Goal: reduce costs associated with timing of load Investment in peaker power plants Managing intermittent renewables (without expensive battery storage) Literature shows consumers do respond, but only modestly Why? 1 Neoclassical idea: Get the prices right and peak load will be solved Small responses indicate real costs of shifting Charge correct prices to induce conservation

6 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours Goal: reduce costs associated with timing of load Investment in peaker power plants Managing intermittent renewables (without expensive battery storage) Literature shows consumers do respond, but only modestly Why? 1 Neoclassical idea: Get the prices right and peak load will be solved Small responses indicate real costs of shifting Charge correct prices to induce conservation 2 Behavioral idea: People are boundedly rational Small responses indicate insufficient information or attention Provide nudges, information, or automation

7 Overview Time-of-use (TOU) electricity pricing: charge more during peak hours Goal: reduce costs associated with timing of load Investment in peaker power plants Managing intermittent renewables (without expensive battery storage) Literature shows consumers do respond, but only modestly Why? 1 Neoclassical idea: Get the prices right and peak load will be solved Small responses indicate real costs of shifting Charge correct prices to induce conservation 2 Behavioral idea: People are boundedly rational Small responses indicate insufficient information or attention Provide nudges, information, or automation So which is closer to the truth?

8 This study Theory ambiguous agnostic, data-driven approach Let the data suggest the mechanism, not imposing assumptions Identify what factors drive heterogeneous responses

9 This study Theory ambiguous agnostic, data-driven approach Let the data suggest the mechanism, not imposing assumptions Identify what factors drive heterogeneous responses Apply (and extend) new machine learning algorithm for estimating heterogeneous causal effects, designed by Athey and Imbens (2016)

10 This study Theory ambiguous agnostic, data-driven approach Let the data suggest the mechanism, not imposing assumptions Identify what factors drive heterogeneous responses Apply (and extend) new machine learning algorithm for estimating heterogeneous causal effects, designed by Athey and Imbens (2016) Data: TOU pricing experiment on Irish households

11 This study Theory ambiguous agnostic, data-driven approach Let the data suggest the mechanism, not imposing assumptions Identify what factors drive heterogeneous responses Apply (and extend) new machine learning algorithm for estimating heterogeneous causal effects, designed by Athey and Imbens (2016) Data: TOU pricing experiment on Irish households Testing >150 dimensions of observable characteristics from survey data for heterogeneous responses

12 Results Average TOU pricing effect: -9% peak consumption

13 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity:

14 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.)

15 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond

16 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness)

17 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change

18 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change 5 Conditional on above, nothing else matters (of 150+ characteristics)

19 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change 5 Conditional on above, nothing else matters (of 150+ characteristics) Implications:

20 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change 5 Conditional on above, nothing else matters (of 150+ characteristics) Implications: These generally point towards behavioral explanations

21 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change 5 Conditional on above, nothing else matters (of 150+ characteristics) Implications: These generally point towards behavioral explanations Can t reliably predict awareness

22 Results Average TOU pricing effect: -9% peak consumption Key Drivers of Heterogeneity: 1 Key result: Unaware households don t respond (-2%, insignif.) 2 Low energy consuming households don t respond 3 Information amplifies effects up to 2x (even conditional on awareness) 4 Consumers are extremely insensitive to the size of the price change 5 Conditional on above, nothing else matters (of 150+ characteristics) Implications: These generally point towards behavioral explanations Can t reliably predict awareness Getting prices right might not be sufficient

23 Experimental Details: Treatment Treatment and Control Group Assignments Bi-Monthly Bill and Energy Statement Monthly Bill and Energy Statement In-Home Display (IHD) Load Reduction Incentive Control Tariff A Tariff B Tariff C Tariff D Control Energy Statement Example

24 Experimental Details: Treatment Treatment and Control Group Assignments Bi-Monthly Bill and Energy Statement Monthly Bill and Energy Statement In-Home Display (IHD) Load Reduction Incentive Control Tariff A Tariff B Tariff C Tariff D Control Price ( cents per kwh) Tariff D Tariff C Tariff B Tariff A Control (No Change) Hour of Day Energy Statement Example

25 Experimental Details: Treatment Treatment and Control Group Assignments Bi-Monthly Bill and Energy Statement Monthly Bill and Energy Statement In-Home Display (IHD) Load Reduction Incentive Control Tariff A Tariff B Tariff C Tariff D Control Price ( cents per kwh) Tariff D Tariff C Tariff B Tariff A Control (No Change) Hour of Day Energy Statement Example

26 Data Household Electricity Consumption (N T 77 million) Data both pre- and during treatment N 3, 000 households T 26, 000 half-hours each

27 Data Household Electricity Consumption (N T 77 million) Data both pre- and during treatment N 3, 000 households T 26, 000 half-hours each Survey data: > 150 complete variables on... Family characteristics: Employment, education, class, household size, etc. House characteristics: age, rooms, style, insulation, window glazing, etc. Appliance and electronics characteristics: heating type, water heating type, immersion heaters, washers, dryers, TVs (by size), computers, game consoles, internet access, etc. Attitudinal/Behavioral: Attitudes towards energy/environment, appliance/electronics usage, reasons for participation, etc. Post-experiment survey: questions about experience with program Selected summary statistics

28 Average Treatment Effect

29 Difference-in-Differences (All Treatments) ln(kw h i,h,t ) = β h T reatment i,h,t + α i,h + λ w,h + ɛ i,h,t

30 Difference-in-Differences (All Treatments) ln(kw h i,h,t ) = β h T reatment i,h,t + α i,h + λ w,h + ɛ i,h,t Treatment Effect (Log Points: ln(yi)) Point Estimate (Insigificant) Point Estimate (Sigificant) Night Day Peak Day Night Hour of Day Seasonal TEs Placebo Test Individual TEs Pre-trend check

31 Heterogeneity

32 Methods: Athey-Imbens and Extensions Athey and Imbens (2016) Extended regression trees to causal inference Estimates CATEs Extensions in this paper Diff-in-diff (vs. diff ) Multiple treatment groups Details

33 Heterogeneity Results

34 Awareness of the Policy is Key to its Effectiveness [4] TE: 14.6% SE: (1.6%) n: 474 [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [6] TE: 11.7% SE: (1.5%) n: 513 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Info. Treatment: Overall Load Reduction Incentive? TE: 10.7% SE: (1.4%) n: 477 [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 8.4% SE: (12.4%) n: 96 [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

35 Awareness of the Policy is Key to its Effectiveness [4] TE: 14.6% SE: (1.6%) n: 474 [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [6] TE: 11.7% SE: (1.5%) n: 513 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Info. Treatment: Overall Load Reduction Incentive? TE: 10.7% SE: (1.4%) n: 477 [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 8.4% SE: (12.4%) n: 96 [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

36 Awareness of the Policy is Key to its Effectiveness [4] TE: 14.6% SE: (1.6%) n: 474 [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [6] TE: 11.7% SE: (1.5%) n: 513 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Info. Treatment: Overall Load Reduction Incentive? TE: 10.7% SE: (1.4%) n: 477 [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 8.4% SE: (12.4%) n: 96 [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

37 Awareness of the Policy is Key to its Effectiveness [4] TE: 14.6% SE: (1.6%) n: 474 [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [6] TE: 11.7% SE: (1.5%) n: 513 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Info. Treatment: Overall Load Reduction Incentive? TE: 10.7% SE: (1.4%) n: 477 [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 8.4% SE: (12.4%) n: 96 [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

38 Awareness of the Policy is Key to its Effectiveness [4] TE: 14.6% SE: (1.6%) n: 474 [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [6] TE: 11.7% SE: (1.5%) n: 513 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Info. Treatment: Overall Load Reduction Incentive? TE: 10.7% SE: (1.4%) n: 477 [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 8.4% SE: (12.4%) n: 96 [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

39 Awareness of the Policy is Key to its Effectiveness [3] TE: 11.2% SE: (1.3%) n: 1933 Info. Treatment: [5] In Home TE: 10.1% Display? SE: (1.3%) n: 1459 [2] TE: 10.3% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) Info. Treatment: [7] Monthly TE: 9.3% Bill? SE: (1.4%) n: 946 yes Overall Load Reduction Incentive? [1] TE: 8.9% SE: (0.9%) n: 2328 Aware of Tariff Change? no [11] TE: 2.3% SE: (1.7%) n: 299 Baseline Average Peak Consumption >= 0.25 kwh (24th pctile) [4] TE: 14.6% SE: (1.6%) n: 474 [6] TE: 11.7% SE: (1.5%) n: 513 [8] [9] [10] TE: 7.9% SE: (1.6%) n: 469 TE: 10.7% SE: (1.4%) n: 477 TE: 8.4% SE: (12.4%) n: 96 [12] [13] TE: 4.2% SE: (1.4%) n: 202 TE: 0.2% SE: (4.5%) n: 97 Robustness Checks: Propensity Tree Honest Tree Temp.-binned

40 Aside: Mean Demand Curves, by Period of Day Price ( cents per kwh) Peak Hours Day Hours Night Hours Consumption (kwh per 30 minutes) Heterogeneous Demand

41 Aside: Mean Demand Curves, by Period of Day Price ( cents per kwh) Peak Hours Day Hours Night Hours Consumption (kwh per 30 minutes) Commonly used constant elasticity assumption is invalid Concern that consumers won t respond to real-time price changes Heterogeneous Demand

42 Implications

43 Implications Cannot reliably predict who will be aware Lasso Model Selection: Lasso table Lasso fitted values Removes almost all covariates Few remaining are modest in size

44 Implications Cannot reliably predict who will be aware Lasso Model Selection: Lasso table Lasso fitted values Removes almost all covariates Few remaining are modest in size Consumer surplus loss is small CS Loss e3 per h.h. annually on average

45 Implications Cannot reliably predict who will be aware Lasso Model Selection: Lasso table Lasso fitted values Removes almost all covariates Few remaining are modest in size Consumer surplus loss is small CS Loss e3 per h.h. annually on average Capacity benefits substantial Capacity benefits e100 per h.h. in avoided capacity costs (one-time benefit) IHD increases this benefit by about e80 (e130 with vs. e50 w/o) Effects would likely be 2-3x larger in U.S. than in Ireland

46 Conclusion 1 Awareness of TOU pricing is key to effectiveness Awareness is not predictable, so focus on information

47 Conclusion 1 Awareness of TOU pricing is key to effectiveness Awareness is not predictable, so focus on information 2 Small consumers don t respond (in levels or percentages) Target larger consumers

48 Conclusion 1 Awareness of TOU pricing is key to effectiveness Awareness is not predictable, so focus on information 2 Small consumers don t respond (in levels or percentages) Target larger consumers 3 Information provision amplifies effects up to 2x, even among aware Information is important

49 Conclusion 1 Awareness of TOU pricing is key to effectiveness Awareness is not predictable, so focus on information 2 Small consumers don t respond (in levels or percentages) Target larger consumers 3 Information provision amplifies effects up to 2x, even among aware Information is important 4 Consumers are extremely insensitive to the size of the price change Raises concern about effectiveness of real-time pricing Caveat: steeper price hikes and/or automation

50 Conclusion 1 Awareness of TOU pricing is key to effectiveness Awareness is not predictable, so focus on information 2 Small consumers don t respond (in levels or percentages) Target larger consumers 3 Information provision amplifies effects up to 2x, even among aware Information is important 4 Consumers are extremely insensitive to the size of the price change Raises concern about effectiveness of real-time pricing Caveat: steeper price hikes and/or automation Getting prices exactly right isn t as important as getting people to pay attention

51 Peaking Interest: How awareness drives the effectiveness of time-of-use electricity pricing Brian C. Prest Ph.D. Candidate Duke University

52 Appendix

53 Summary Statistics - Demographics Mean Std. Dev. Min Max Age Group: (Indicator) Age Group: (Indicator) Age Group: (Indicator) Age Group: (Indicator) Age Group: (Indicator) Age Group: 65+ (Indicator) Social Class: AB, Manager/Professional (Indicator) Social Class: C1, White collar (Indicator) Social Class: C2, Skilled manual (Indicator) Social Class: DE, Unskilled manual/other (Indicator) Social Class: Farmer (Indicator) Education: None (Indicator) Education: Primary (Indicator) Education: Secondary without Cert. (Indicator) Education: Secondary to Cert. (Indicator) Education: Third (Indicator) Education: Refused (Indicator) Number of Adults in Home Number of Children Under 15 in Home Has Children Under 15 in Home (Indicator)

54 Summary Statistics - House Characteristics Mean Std. Dev. Min Max Own home outright (Indicator) Own home with mortgage (Indicator) Home Age: Less than 5 years (Indicator) Home Age: 5-9 years (Indicator) Home Age: years (Indicator) Home Age: years (Indicator) Home Age: More than 75 years (Indicator) Home Style: Apartment (Indicator) Home Style: Bungalow (Indicator) Home Style: Detached (Indicator) Home Style: Semi-Detached (Indicator) Home Style: Terraced/Townhome (Indicator) Number of Bedrooms

55 Summary Statistics - Appliances Mean Std. Dev. Min Max Home Heat: Electric, Central (Indicator) Home Heat: Electric, Plug-in (Indicator) Home Heat: Oil (Indicator) Home Heat: Gas (Indicator) Home Heat: Solid Fuel (Indicator) Water Heat: Electric, Central (Indicator) Water Heat: Electric, Immersion (Indicator) Water Heat: Oil (Indicator) Water Heat: Gas (Indicator) Water Heat: Solid Fuel (Indicator) Washing Machine (Indicator) Tumble Dryer (Indicator) Dishwasher (Indicator) Stand alone freezer (Indicator) Cook stove type: Electric (Indicator) Cook stove type: Gas (Indicator) Cook stove type: Oil (Indicator) Cook stove type: Solid (Indicator) Number of TV s (Less than 21 inches) Number of TV s (More than 21 inches) Number of Desktop Computers Number of Laptop Computers Number of Game Consoles Internet Access in Home (Indicator) Return to main

56 Invitation Letter Return to main

57 Energy Usage Statement Return to main

58 Refrigerator Magnet and Sticker

59 In-Home Electricity Display (IHD)

60 Average Consumption Profiles, by Group and Period Consumption (kwh per 30 minutes) Night Rate (9 12 ) Control Group Baseline Period Treatment Period Day Rate ( ) Peak Rate (20 38 ) Day Rate ( ) Night Rate (9 12 ) Hour of Day Balance Checks: t-tests LPM

61 Average Consumption Profiles, by Group and Period Consumption (kwh per 30 minutes) Night Rate (9 12 ) Control Group Treatment Group Baseline Period Treatment Period Day Rate ( ) Peak Rate (20 38 ) Day Rate ( ) Night Rate (9 12 ) Hour of Day Balance Checks: t-tests LPM

62 Average Consumption Profiles, by Group and Period Consumption (kwh per 30 minutes) Night Rate (9 12 ) Control Group Treatment Group Baseline Period Treatment Period Day Rate ( ) Peak Rate (20 38 ) Day Rate ( ) Night Rate (9 12 ) Hour of Day Balance Checks: t-tests LPM Treatment/control are unbalanced need diff-in-diff

63 Balance Checks: t-tests Variable Control Mean Treatment Mean t-statistic p-value Unbalanced Variables (α < 0.05) 1 Employment status: Retired (Indicator) Number of Large Televisions (21+ inch) Number of Electronics Age Group: 65+ (Indicator) Has Children Under 15 in Home (Indicator) Number of Residents Social Class: AB (Highest) (Indicator) Education: Primary only (Indicator) Baseline Average Consumption (Night Hours) Internet Access in Home (Indicator) Number of Desktop Computers Number of Children Under 15 in Home Housing Status: Own with Mortgage (Indicator) Others in Household Use Internet Regularly (Indicator) Selected Balanced Variables (α 0.05) 15 Baseline Average Consumption (Peak Hours) Number of Adults in Home Cook stove type: Electric (Indicator) Number of Laptop Computers Baseline Average Consumption (Day Hours) Unemployed, not seeking job (Indicator) Home Heat: Solid Fuel (Indicator) Interested in changing energy use for environment* Female (Indicator) Education: Secondary to Certificate (Indicator) Satisfied with billing frequency* Observations 3,006 Number of Variables Tested 122 Number of Variables Not Shown 97 Number of Variables Significant (5% level) 14 Share of of Variables Significant (5% level) 11.5% Return to main

64 Balance Checks: LPM Dependent variable: Treated (Indicator) Baseline Average Consumption (Peak Hours) 0.03 (0.07) Baseline Average Consumption (Night Hours) 0.14 (0.15) Baseline Average Consumption (Day Hours) (0.12) Number of Large Televisions (21+ inch) 0.02 (0.01) Age Group: 65+ (Indicator) 0.13 (0.11) Number of Adults in Home 0.01 (0.01) Internet Access in Home (Indicator) 0.01 (0.02) Number of Desktop Computers in Home 0.01 (0.02) Others in Household Use Internet Regularly (Indicator) (0.02) Cook stove type: Electric (Indicator) (0.06) Observations 3,006 R Adjusted R Number of Covariates 109 Number of Covariates Not Shown 100 Number of Covariates Significant (5% level) 2 Share of Covariates Significant (5% level) 1.8% Return to main

65 Placebo test for TOU pricing: Weekends and Holidays Treatment Effect (Log Points: ln(yi)) Point Estimate (Insigificant) Point Estimate (Sigificant) Night Day Peak Day Night Hour of Day Return to main

66 Weekly Treatment Effects Treatment Effect (Log Points: ln(yi)) Week of Year Estimated Treatment Effect 95% Confidence Interval Return to main

67 Diff-in-Diff (Individual Treatments) Tariff A, Bi monthly Bill Tariff A, Monthly Bill Tariff A, Bi monthly Bill + IHD Tariff A, Bi monthly Bill + OLR Tariff B, Bi monthly Bill Tariff B, Monthly Bill Tariff B, Bi monthly Bill + IHD Tariff B, Bi monthly Bill + OLR Treatment Effect Treatment Effect Treatment Effect Tariff C, Bi monthly Bill Hour of Day Tariff D, Bi monthly Bill Hour of Day Treatment Effect Treatment Effect Tariff C, Monthly Bill Hour of Day Tariff D, Monthly Bill Hour of Day Treatment Effect Treatment Effect Tariff C, Bi monthly Bill + IHD Hour of Day Tariff D, Bi monthly Bill + IHD Hour of Day Treatment Effect Treatment Effect Tariff C, Bi monthly Bill + OLR Hour of Day Tariff D, Bi monthly Bill + OLR Hour of Day Return to main

68 Checking for pre-trends in peak consumption Consumption (kwh per 30 minutes) Baseline Period Control Group Treatment Group Treatment Period Jul 2009 Sep 2009 Nov 2009 Jan 2010 Mar 2010 May 2010 Jul 2010 Sep 2010 Nov 2010 Time Return to main

69 Robustness Check: Propensity Tree [1] TE: 8.9% SE: (0.9%) n: 2328 yes Aware of Tariff Change? no [2] TE: 10.4% SE: (1.4%) n: 2029 Baseline Average Peak Consumption >= 0.12 kwh (5th pctile) [3] TE: 11.4% SE: (1.3%) n: 1933 Info. Treatment: In Home Display? [4] [5] [6] [7] TE: 10.3% TE: 8.6% SE: (1.3%) SE: (12.4%) n: 1459 n: 96 TE: 14.7% SE: (1.6%) n: 474 TE: 2.3% SE: (1.7%) n: 299 Return to main

70 Robustness Check: Honest Tree [1] TE: 8.9% SE: (1.4%) n: 1151 yes Aware of Tariff Change? no [2] TE: 10.1% SE: (2%) n: 607 Baseline Average Peak Consumption >= 0.22 kwh (18th pctile) [3] TE: 9.6% SE: (2%) n: 508 Info. Treatment: In Home Display? [4] [5] [6] [7] TE: 8.6% TE: 8.9% SE: (1.9%) SE: (5.8%) n: 418 n: 99 TE: 12.7% SE: (2.3%) n: 90 TE: 1.4% SE: (2.7%) n: 544 Return to main

71 All Subgroups are Insensitive to Size of Price Increase Price ( cents per kwh) IHD Group, Peak Hours Monthly Bill Group, Peak Hours OLR Group, Peak Hours Bi monthly Bill Group, Peak Hours Unaware, Large User Group, Peak Hours All Households, Day Hours All Households, Night Hours Consumption (kwh per 30 minutes) Return to main

72 Temperature-Binned Responses Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

73 Temperature-Binned Responses: Home Heating Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) Electric Home Heat No Electric Home Heat ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

74 Temperature-Binned Responses: Water Heating Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) Electric Water Heat No Electric Water Heat ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

75 Temperature-Binned Responses: Cook Stove Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) Electric Cook Stove No Electric Cook Stove ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

76 Temperature-Binned Responses: Tumble Dryer Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) Tumble Dryer No Tumble Dryer ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

77 Temperature-Binned Responses: Dishwasher Treatment Effect (Log Points: ln(yi)) Temperature Bin (Degrees Celsius) Dishwasher No Dishwasher ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Return to main

78 Histogram of Temperature Binns Share of Peak Hours ( 4, 1] ( 1,2] (2,5] (5,8] (8,11] (11,14] (14,17] (17,20] Temperature Bin (Degrees Celsius) Return to main

79 Lasso Post-Selection LPMs on Awareness Aware of Tariff Change (Indicator) LPM Lasso-Min Lasso-1SE Internet Access in Home (Indicator) Use Internet Regularly (Indicator) Water Heating Fuel: Oil (Indicator; none omitted) Number of Dishwashers in Home Number of Desktop Computers in Home Expect Participating in Trial Will Reduce My Bill (Indicator) Female Respondent (Indicator) Social Class: AB (Highest) (Indicator) Education: Third (e.g., University) (Indicator) Info. Treatment: In-Home Display (Indicator; Bi-monthly Bill omitted) Info. Treatment: Monthly bill (Indicator; Bi-monthly Bill omitted) Info. Treatment: OLR (Indicator; Bi-monthly Bill omitted) R Adjusted R Observations 2,328 2,328 2,328 Number of Covariates Number of Covariates Not Shown Number of Covariates Significant (5% level) 14 (11.4%) na na Return to main

80 Fitted Values from Awareness Probability Models Frequency Full Model Lasso (RMSE Min.) Lasso (1 Std. Error, right axis) Frequency Predicted Probability of Awareness (%) Return

81 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Loss in CS Excluding Transfer (b) Loss in CS Including Transfer (a + b) Change in Bill (a d) Average Household CS-E Dist. CS-I Dist. Bill Dist.

82 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Loss in CS Excluding Transfer (b) Loss in CS Including Transfer (a + b) Change in Bill (a d) Average Household e3 CS-E Dist. CS-I Dist. Bill Dist.

83 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Loss in CS Excluding Transfer (b) Loss in CS Including Transfer (a + b) Change in Bill (a d) Average Household e3 e19 CS-E Dist. CS-I Dist. Bill Dist.

84 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Loss in CS Excluding Transfer (b) Loss in CS Including Transfer (a + b) Change in Bill (a d) Average Household e3 e19 e5 CS-E Dist. CS-I Dist. Bill Dist.

85 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Average Household Bi-Monthly Bill Loss in CS Excluding Transfer (b) e3 e2 Loss in CS Including Transfer (a + b) e19 e19 Change in Bill (a d) e5 e9 CS-E Dist. CS-I Dist. Bill Dist.

86 CS Loss to Households is Small Heterogeneous consumer impacts (trt. period), computed half-hourly. Annual Household Impacts Average Household Bi-Monthly Bill IHD Loss in CS Excluding Transfer (b) e3 e2 e4 Loss in CS Including Transfer (a + b) e19 e19 e18 Change in Bill (a d) e5 e9 e1 CS-E Dist. CS-I Dist. Bill Dist.

87 Capacity Benefits Are Substantial e100 per household average capacity benefit (-9% peak load)*(1200 Watt peak load)*(e0.86/watt) Return

88 Capacity Benefits Are Substantial e100 per household average capacity benefit (-9% peak load)*(1200 Watt peak load)*(e0.86/watt) One-Time Capacity Benefits per Household, with and without IHD Capacity Benefit Note: Benefits are estimated assuming the estimated treatment effect for each group: all households (-8.9%), the bi-monthly bill group (-4.8%), and the IHD group (-12.5%). Return

89 Capacity Benefits Are Substantial e100 per household average capacity benefit (-9% peak load)*(1200 Watt peak load)*(e0.86/watt) One-Time Capacity Benefits per Household, with and without IHD Average Household Capacity Benefit e100 Note: Benefits are estimated assuming the estimated treatment effect for each group: all households (-8.9%), the bi-monthly bill group (-4.8%), and the IHD group (-12.5%). Return

90 Capacity Benefits Are Substantial e100 per household average capacity benefit (-9% peak load)*(1200 Watt peak load)*(e0.86/watt) One-Time Capacity Benefits per Household, with and without IHD Average Household Bi-Monthly Bill Capacity Benefit e100 e50 Note: Benefits are estimated assuming the estimated treatment effect for each group: all households (-8.9%), the bi-monthly bill group (-4.8%), and the IHD group (-12.5%). Return

91 Capacity Benefits Are Substantial e100 per household average capacity benefit (-9% peak load)*(1200 Watt peak load)*(e0.86/watt) IHD adds about e80 to capacity benefit One-Time Capacity Benefits per Household, with and without IHD Average Household Bi-Monthly Bill In-Home Display Capacity Benefit e100 e50 e130 Note: Benefits are estimated assuming the estimated treatment effect for each group: all households (-8.9%), the bi-monthly bill group (-4.8%), and the IHD group (-12.5%). Return

92 Real-Time Pricing May Not Be Superior Consumption (kwh) kwh, Flat 14.1 cents/kwh (left) kwh, TOU Pricing (left) kwh, Real Time Pricing (left) 14.1 cents/kwh Fixed Tariff (right) Marginal Price (right) cents/kwh Hour of Day Return

93 Distribution of CS Loss (Excluding Transfer Cost) Density Bi monthly Bill Group (Avg = 1.78) IHD Group (Avg = 3.61) Euro ( ) Return

94 Distribution of CS Loss (Including Transfer Cost) Density Bi monthly Bill Group (Avg = 19.18) IHD Group (Avg = 17.66) Euro ( ) Return

95 Distribution of Bill Effects Density Euro ( ) Bi monthly Bill Group (Avg = 8.61) IHD Group (Avg = 1.38) Return

96 Extension - Multiple Treatment Groups For each control observation i and treatment m {1,..., M}, generate a new pseudo-observation i m with Y im Y i X im X i W im W i ( = 0) { 1 for m For m = m {1,..., M} Wi m m 0 for m m, for a total of M n C control observations, replacing the n C original ones

97 Extension - Multiple Treatment Groups Transformed LATE: 1 1 Y i n T M n i S C T Y i = 1 i S n T C = 1 n T = ˆτ, Y i i S T Y i 1 n i S C T 1 M M n C i S C Y i i S C Y i which is the same as the LATE estimate of the untransformed data. Return