Home production and the residential electric load curve

Abstract

Most recent works concerning time-of-day demands for electricity totally ignore home production. In this article we show that an understanding of the timing of household productive activities is crucial to an understanding of the residential electric load curve, and to an understanding of future responses to time-of-day, seasonal, or other marginal cost based electricity pricing strategies. We show that the timing of energy-intensive household activities can be modeled in terms of classical inventory adjustment processes. Those activities characterized by long re-order cycles are most likely to be shifted in response to time-of-day prices. Residential load curve data and data from the National Time Use Study suggest that economists have tended to underestimate the importance of water heating in affecting the load curve. Because of the relatively long re-order cycle of activities using hot water, and the possibility of timing the water heater, these activities should be quite responsive to well designed time-of-use rate structures, both in the short- and long-run.