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| 1 |
ID:
166361
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| Summary/Abstract |
This study evaluates the distribution of electricity subsidies to residential customers in Addis Ababa, Ethiopia in 2016 that results from the current increasing block tariff (IBT) structure. Customer billing data supplied by the electricity utility were matched with socioeconomic information collected from a survey of 987 households, and used with a utility-specific estimate of the costs of electricity service to estimate household-specific subsidies. The analysis differentiates between primary customers, who own an electricity account, and nonprimary customers, who pay a primary account holder, and presents the first detailed analysis of the incidence of subsidies provided to households with private versus shared electricity connections. Results show that households in the poorest quintile received 7% of the total subsidy, while households in the wealthiest quintile received 37%. The majority of households with shared connections were in poorer quintiles, and 80% in the poorest quintile were nonprimary customers. The regressive outcomes of the IBT structure are explained by two of its attributes: (1) the volumetric rates in all tariff blocks are substantially below the total average cost of delivery of the service; and (2) there is only a moderate association between electricity consumption and household wealth.
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| 2 |
ID:
176732
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| Summary/Abstract |
Lesotho has a poverty rate above 50%, this renders a bulk of households connected to the grid unable to purchase enough energy to cover the essential basic needs at the current tariffs. This is supported by the declining average household consumption reported by Lesotho Electricity Company (LEC) despite an increasing customer base. Even more crucial, for low income countries, tariff levels should balance social stability, affordability, fairness, energy efficiency as well as cost recovery especially because the poor make up the majority of the population. Based on the poverty line, a lifeline tariff of 0.5 to 0.6 Maloti(M)/kWh (2017 tariffs) for a threshold of up to 30 kWh/month is proposed which is 35%–42% lower than the current domestic tariff of 1.424 M/kWh. The standard domestic tariff will need to increase to 1.856 M/kWh to allow for cross-subsidisation and hence maintain the financial standing of the utility company. The threshold capacity is based on the observation that in 2016, around 30% of grid connected households consumed less than 30 kWh/month which is enough electricity to cover the basic needs of an average household. Hence, an increasing block tariff (IBT) approach is proposed such that the first 30 kWh/month are set at a lifeline tariff and any excess is charged at a standard rate which is set such that it cross-subsidises the lifeline tariff.
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| 3 |
ID:
150439
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| Summary/Abstract |
Designing a desirable increasing block tariff for the residential gas retail market has been a challenging task for regulated utilities, especially in China. To deal with such problems, in this paper, we establish an agent-based, computational economics system to provide a formal evaluation of the direct and indirect influences of several issued increasing block tariffs in the residential gas market. Moreover, a comprehensive demand response behaviour model has been improved in term of price elasticity, while still coping with income levels and complex social environment. We also compute and compare the outcomes of several increasing block tariffs with the initial flat tariff by running the system on a test-case using real-world data from a middle-scale gas retail market in Wuhan. The results indicate that there is an appropriate increasing block gas tariff scheme that has greater ability to improve social equity while still ensuring operator revenue and promoting gas conservation. In order to offset the limitations of the proposed increasing block tariffs, the regulator should adopt some complementary measures, such as applying appropriate policies targeting the intended consumers, and allowing large families to obtain extra allowance of volume.
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