  Demand response (DR) refers to change in electricity consumption pattern of
customers during on-peak hours in lieu of financial gains to reduce stress on
distribution systems. Existing dynamic price models have not provided adequate
success to price-based demand response (PBDR) programs. It happened as these
models have raised typical socio-economic problems pertaining to cross-subsidy,
free-riders, social inequity, assured profit of utilities, financial gains and
comfort of customers, etc. This paper presents a new dynamic price model for
PBDR in distribution systems which aims to overcome some of the above mentioned
problems of the existing price models. The main aim of the developed price
model is to overcome the problems of cross-subsidy and free-riders of the
existing price models for widespread acceptance, deployment and efficient
utilization of PBDR programs in contemporary distribution systems. Proposed
price model generates demand-linked price signal that imposes different price
signals to different customers during on-peak hours and remains static
otherwise. This makes proposed model a class apart from other existing models.
The novelty of the proposed model lies in the fact that the financial benefits
and penalties pertaining to DR are self-adjusted among customers while
preserving social equity and profit of the utility. Such an ideology has not
been yet addressed in the literature. Detailed investigation of application
results on a standard test bench reveals that the proposed model equally cares
regarding the interests of both customers and utility. For economic assessment,
a comparison of the proposed price model with the existing pricing models is
also performed.
