Sayyad Nojavan

After restructuring and deregulation of the electricity industry, it is stated that the power system will be more efficient if the differences between peak and low load periods are kept as small as possible. It has been demonstrated that the perfect balance between the supply and demand in the real time is necessary for a reliable operation of electricity system. Demand response program is defined as changes in electric consumption patterns of end-user clients in response to changes of electricity price over time or to incentive payments designed to decrease high electricity usage at high wholesale market prices times or when the system reliability problems occur. In other words, the procedure through which consumers respond to the price signals inserted in tariffs by changing their consumption patterns is called the demand response programs (DRPs). Moreover, DRPs can help the independent system operator (ISO) to reduce the price volatility during peak demand hours. Different DRPs can be classified into two main categories: incentive-based programs (IBPs), which are further divided into classical programs and market-based programs, and price-based programs, (PBPs), which are based on the dynamic pricing rates in which the electricity tariffs are not flat. The rates fluctuate following the real-time cost of electricity. The ultimate objective of these programs is to flatten the demand curve by offering a high price during peak periods and lower prices during off-peak periods. These rates include the time of use (TOU) rate, critical peak pricing (CPP), extreme day pricing (EDP), extreme day CPP (ED-CPP), and real-time pricing (RTP). The basic type of PBP is the TOU rates, which are the rates of electricity price per unit consumption that differ in different blocks of time. The rate during peak periods is higher than the rate during off-peak periods. The simplest TOU rate has two time blocks: the peak and the off-peak. The rate design attempts to reflect the average co