Abstract
Current residential electricity tariffs often combine a flat energy price with a fixed charge linked to contracted power, resulting in electricity bills that are weakly responsive to changes in consumption. This lack of proportionality reduces incentives for energy savings and may undermine demand-side efficiency.This paper proposes a novel Power-Conditioned Pricing (PCP) tariff, in which unit energy prices depend on the power level at which electricity is consumed. By associating higher prices with higher consumption intensity, the proposed tariff introduces progressivity while preserving transparency and regulatory feasibility. The tariff is calibrated to ensure revenue neutrality with respect to the current tariff for each contracted power level.Two complementary calibration strategies are analysed: a profile-based approach using representative regulatory load profiles, and an empirical approach based on statistical distributions derived from real consumer data. To assess consumer responsiveness, electricity bills are evaluated under both vertical and horizontal consumption adjustment models.Results show that bill elasticity increases from values between 0.43–0.73 under the current tariff to values close to unity under PCP, while maintaining revenue neutrality across contracted power levels. These findings suggest that power-conditioned pricing constitutes a promising alternative to current residential tariff structures, better aligned with energy-efficiency and conservation objectives.

Abstract