HOW DO CUSTOMERS RESPOND TO REAL-TIME PRICING?
Even when the customer is a commercial or industrial organization, the answer can prove illusive.
Real-life responses to RTP depend on the entirety of the incentive and monitoring systems, group dynamics and individual personalities. Managers within an organization respond to RTP signals based on information and incentives that only they can know and comprehend. Only people employed by the organization are privy to these intangibles, which remain highly idiosyncratic within any organization. As a result, any analysis of RTP responses can never rise above the preliminary or the suggestive.
The ability to self-generate to provide stand-by or backup power allows a customer to shift load off the system when prices exceed the costs of self-generation. In addition, the product lines produced by a customer, the industrial processes used, and the desire or need for employee and customer comfort are important considerations affecting individual responses. Incentives for cost-saving and the sanctions for violating company guidelines may be decisive in assessing the ability to respond to RTP signals. Moreover, the specific conditions that vary from one hour to another during the day, such as temperature and climate conditions, are more important in some organizations than in others. Only the employees know how to respond optimally on a real-time basis.