Time-and-Level-of-Use (TLOU) is a recently proposed pricing policy for energy, extending Time-of-Use with the addition of a capacity that users can book for a given time frame, reducing their expected energy cost if they respect this self-determined capacity limit. We introduce a variant of the TLOU defined in the literature, aligned with the supplier interest to prevent unplanned over-consumption. The optimal price-setting problem of TLOU is defined as a bilevel, bi-objective problem anticipating user choices in the supplier decision. An efficient resolution scheme is developed, based on the specific discrete structure of the lower-level user problem. Computational experiments using consumption distributions estimated from historical data illustrate the effectiveness of the proposed framework.
@article{arxiv.1809.00512,
title = {A Bilevel Approach to Optimal Price-Setting of Time-and-Level-of-Use Tariffs},
author = {Mathieu Besançon and Miguel F. Anjos and Luce Brotcorne and Juan A. Gomez-Herrera},
journal= {arXiv preprint arXiv:1809.00512},
year = {2019}
}