Events

Prof. Praveen Kopalle
Signal Companies’ Professor of Management &
Professor of Marketing
Area Chair, Marketing
Tuck School of Business at Dartmouth
Dartmouth College

ABSTRACT

The first part of this study examines how electric utilities and regulators can encourage residential consumers to conserve electricity during the hottest summer days and shift electricity load from the day to off-peak, nighttime hours. We analyze a two-year field experiment involving 280 Texas households that explores approaches to conservation and load-shifting to enable emission reductions and reduce generation costs. Our critical peak pricing intervention reduces electricity consumption by 14% on the peak hours of the hottest days, leading to greenhouse gas emission reductions of about 16%. A key contribution of this study is the use of high-frequency appliance-level data. We show that 74% of the critical peak response is from reducing air conditioning. In a complementary nighttime pilot program, consumers respond strongly to lower prices by programming the timing of electric vehicle charging. Our work highlights how automation can influence the consumer tradeoffs relating to effort costs, discomfort, monetary incentives, and warm glow.

In a second part, we develop a marketing-centric framework for delivering affordable, clean energy to consumers by leveraging the marketing mix to encourage a bi-directional flow of information between firms and consumers. Using our field experiment results and a decarbonization simulation, our findings point to the need for a “system-wide” solution. Specifically, we showcase the real effects of a combination of an automated solution and dynamic electricity pricing on behavior, and examine the role of dynamic prices and automation in transitioning to 100% clean electricity.