Electricity Tariff Structure Optimization

Abstract

The design of electricity tariff can be very complex not only due to the regulatory policies factors but also the concern of satisfying various parties such as the utility firms and their respective customers. This paper addresses the optimized electricity tariff structure based on the 2014 electricity tariff structure in Peninsular of Malaysia by considering the customer and demand growth factors in next year forecast. Two optimization procedures are proposed namely, hybrid of goal programming and stochastic optimization and ILOG optimization system. In both estimation models, scenario-based influenced the current and forecast sale which mainly reflected by the tariff setting for each of the electricity customers including domestic, industrial, commercial, specific agriculture, mining as well as street lighting. In overall, firstly, both optimization methodology approaches reveal the similar result with respect to the lifeline bands of tariff especially by ILOG produce on average value for each of the customer category that useful for further analysis. Secondly, the small changes in demand growth and customer growth across the scenarios insignificantly change in the tariff structure among electricity customer except for domestic.