Abstract
The majority of existing econometric studies of the demand for eiectricity estimate models of kilowatt-hour usage as a function of prices, income and other economic variables.’ Estimates of kilowatt-hour demand equations, or elasticities of demand for total usage, are only partially useful for utility planning purposes and for analyzing policy alternatives in the electric utility industry. Capacity is built to meet system and monthly peak demands. Utilities are interested not only in kilowatt-hour output, but annual peaks, monthly peaks and the load duration curve.’ In this paper we estimate as econometric model of peak electric demands using time series data for one utility, Virginia Electric Power Company. The estimated econometric model relates system megawatt peaks to marginal electricity prices, temperature, income, and industrial activity. The model is estimated using monthly VEPCO data for the period 1960-1973 for the four summer months, June, July, August and September.
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