Electric utility rate structures and distributed thermal energy storage: A cost-benefit analysis

We examine three alternative methods by which electric utilities might take advantage of distributed thermal energy storage to smooth out their load profiles. These three methods are: (1) time-specific rates, (2) time-invariant rates with subsidized storage, and (3) direct load controls with no subsidies to storage. The optimal form of each of these policies is determined and relations indicating the relative desirability of each are developed.