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Australian Consumers’ Likely Response to Cost-Reflective Electricity Pricing

A recent study by CSIRO’s behavioural economics team has researched how Australian energy consumers might respond to a cost reflective pricing scheme. The 79-page report concluded that “consumers find all forms of cost-reflective pricing significantly less attractive than traditional flat rate tariffs”. The report also found that “Consumers are particularly resistant to real-time pricing and (especially) capacity pricing, presumably on account of their greater novelty and complexity (hence, perceived risk), and pervasive mistrust and rejection of the concept that electricity should cost more depending upon demand.”