Tariff

Syntax

Tariff(Billing Period, Customers, Flat First Rate, Ratei, UpperLimiti,.. Raten) 

Description

Use the Tariff function to specify the energy price structure paid by households or industries as part of LEAP's optional Affordability Analysis. LEAP will calculate the total cost paid by groups of consumers at a specified branch and you can then compare that to the overall income level (or revenues for industrial consumers) of those consumers defined at the same branch. The Tariff function allows you to flexibly specify tiered energy pricing structures, which are common in many countries, and which are sometimes employed as a means of promoting energy conservation. The Tariff function allows for the approximation of revenues and customer costs generated by such a pricing structure. 

The Tariff function takes a variable number of parameters, and we recommend using LEAP's function wizard to help populate those parameters. The parameters of the Tariff function are as follows:

  • BillingPeriod: The billing period should be set to "Monthly" (or "Month"), "Quarterly" (or "Quarter"), or "Annual" (or "year"). In cases where demand for a fuel is specified using time-sliced load shapes for each demand-side technology, LEAP will calculate costs by considering the time slices that fall within each billing period. In cases where demand for a fuel is calculated annually or where your time-slices are not compatible with your billing periods (e.g. you have seasonal time slices and monthly billing periods), LEAP will take annual fuel demands and divide them by 12 or 4 to calculate equal monthly or quarterly consumption. 

  • Customers: The number of customers at the chosen demand branch. The price is calculated for the average customer use - actual rates will differ because some customers will use more than the average and some will use less. LEAP takes the total energy used at the branch and divides by the number of customers to derive the average usage per customer. The tariff will be applied to this average usage to get the average cost per customer. Use a variable reference expression if you want to link this parameter to data already specified elsewhere (for example enter "\Key\Households" to link to a key assumption that already contains the number of households. Alternatively, if you simply leave this parameter blank or enter "AL", then LEAP will take the number of customers from the Total Activity variable defined at the same branch where the price is entered.

  • Flat First Rate: Set this to True or False to indicate if the first rate is a fixed cost regardless of minimum usage within this block. A fixed rate may also be known as a flat rate or a base rate.

  • The following two parameters are repeated for each rate except for the final rate, which has only a rate and no upper limit.

  • Rate_i: The cost of energy for rate i, either a unit cost (e.g., $/GJ) or optionally a flat rate for the first block. Measured in the currency and energy units specified for the variable as a whole.

  • UpperLimit_i: The upper limit energy use for rate i. This parameter is not included for the last rate, which has no upper limit. Measured in the energy unit specified for the function.

Example

100,000 households in Freedonia are billed every month, using the following pricing structure:

  A flat rate of $20 per bill includes up to 100 kWh
  100 - 300 kWh at $0.23/kWh
  300 - 600 kWh at $0.25/kWh
  Over 600 kWh at $0.30/kWh

The following expression should be entered in the Electricity Price variable:

Tariff(Monthly, 100000, true, 20, 100, 0.23, 300, 0.25, 600, 0.30)

Make sure also that the units for the price variable are set to dollars per Kilowatt-Hour ($/kWh).

In this example, assuming an average monthly usage of 715 kWh, the usage would be split up into four blocks of 100, 200, 300 and 115 kWh usage and the total monthly cost in dollars would be calculated as follows:

$20 + (200 kWh * $0.23/kWh) + (300 kWh * $0.25/kWh) + (115 kWh * $0.30/kWh) = $175.05