The electricity retailers try to obtain the consumers’ electricity energy at the minimum cost from different energy resources such as self-generation facilities, bilateral contracts, and pool market purchases in the restructured electricity markets. Hence, more attention should be paid on the demand response programs (DRP) which aims to energy purchased cost reduction. This paper develops a stochastic energy procurement management for electricity retailers with multiple options considering DRP. The pool market price uncertainty is modeled based on a scenario distribution curve approach such as the normal distribution curve. The curve is divided into several areas, where each area is identified as a scenario, and the problem is solved using the stochastic programming. Also, this paper is focused on investigating the effect of DRP on the total expected procurement cost. Finally, a new stochastic framework is presented for reduction of the expected procurement cost of retailers by using the demand response programs.
