Price responsiveness in electricity markets: Implications for demand response in the midwest

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This paper provides an empirical analysis of price responsiveness in retail and wholesale markets in the Midcontinent ISO electricity markets. In the retail market, consumers do not often observe real-time price changes and pay a pre-determined flat rate, but are able to respond to price over longer time periods. In the wholesale electricity market, buyers are able to adjust their electricity purchases based on real-time price changes. Our findings show that retail industrial customers respond differently in different across states in the Midwest. We also find differences in real-time wholesale price elasticities between sub-regional pricing hubs in the MISO footprint. Results suggest that the observed differences in price responsiveness of demand across market levels and sub-regions are associated with demand response program adoption.

Original languageEnglish (US)
Pages (from-to)23-49
Number of pages27
JournalEnergy Journal
Issue number1
StatePublished - Jan 2017



  • Demand response
  • Electric utilities
  • Electricity demand
  • Electricity prices
  • Empirical demand analysis

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