## Marginal Energy Prices -

## RECS97 Update
The original estimation ofresidential ni~rginal energy prices at the individual household level (asreported in theMarginal Energy Prices Report, 

### http:llwww.eren.doe.govibuildingslcodes~standards/applbrflpdfslmargina1~ energygrice.pdf)was based on household energy billing data from EIA's 1993 RECS survey. When the 1997RECS survey data became available, LBNL updated its estimation ofresidential marginal energy prices at the individual household level using that data. In addition, LBNL incorporated several refinements (as described below) to the marginal price estimation method it had originally developed. Presented below are the: RECS97-based results. RefinementstoLBNL's marginal price estimation method. RECS93-based results re-calculated using the refined marginal price estimation method that was applied to the RECS97 data. 

## Marginal Energy Prices - RECS97 Update
The original estimation ofresidential marginal energy prices at the individual household level (as reported in the Marginal Energy Prices Report, http://www.eren.doe.govlbuildings/codes_standards/applbrf/pdfs/marginal_**energy~rice.pdf)** was based on household energy billing data from EIA's 1993 RECS survey. When the 1997 RECS survey data became available, LBNL updated its estimation ofresidential marginal energy prices at the individual household level using that data. In addition, LBNL incorporated several refinements (as described below) to the marginal price estimation method it had originally developed. Presentedbelow are the: RECS97-based results. Refinements to LBNL's marginal price estimation method. RECS93-based results re-calculated using the refined marginal price estimation method that was applied to the RECS97 data.

## Marginal Ener~v Prices -

## Summary of

## RECS97Results Table 

### 1. Marginal Residential Electricity Prices

## - RECS97 I I I



## Electricity -

## RECS97 Prices ($/kwh,in 1997$) (Weighted Mean) %

### Difference between Marginal Price and Average Price 

# I Annual 

# I
Households 

# I Summer 

# I 9.1 

# I 1 -2.5% 

# / -76.1% to +288.9% MARGINAL I I I I I 

### AVERAGE wlAcceptable Seasonal Prices

All Households 

# I 8.7 

# I 9.4 

# 1 -6.9% 

# 1 Households wlo Acceptable Seasonal Prices

Table

### 2. Marginal Residential Natural Gas Prices 

## - RECS97 I 1 I 

### Weighted Mean Range
I



### 9.0 9.4 Nm-S~mmer



## Natural Gas -

## RECS97 8.5 9.6

Note for Tables 1 and 2: For any household, a negative percent difference between marginal price and average price indicates that the household's marginal price is smallerthan the household's average price. A positive percent difference between marginal price and average price indicatesthat the household's marginal price is largerthan the household's averageprice. I



### Households wlAcceptable Seasonal Prices

All Households 

## -10.0% -4.5%

Prices ($/ccf, in 1997$)

(Weighted Mean)

70.1 63.7 66.4 Winter Non-Winter -72.2% to +73.3% -55.3% to +397.5%

%

### Difference between Marginal Price andAverage Price MARGINAL

Households w/o Acceptable Seasonal Prices 66.0 Weighted Mean Annual AVERAGE Range -96.5% to +179.4% -81.6% to +57.9% -90.8% to +33.7% 76.5
82.4 78.5 -4.4% -15.3% -14.5% -12.6% 

## Marginal Energy Prices - Summary ofRECS97 Results Table 1. 

### Marginal Residential Electricity Prices
- RECS97



## Electricity - RECS97 Prices (¢/kWh, in 1997$) % Difference between (Weighted Mean) Marginal Price and Average Price Annual MARGINAL AVERAGE Weighted Mean Range Households Summer 9.1 -2.5% -76.1 % to +288.9% wi

Acceptable 9.4 Seasonal Prices Non-Summer 8.5 -10.0% -72.2% to +73.3% Households wlo Acceptable Seasonal Prices 9.0 9.6 -4.5% -55.3% to +397.5% All Households 8.7 9.4 -6.9%


### Table 2. Marginal Residential Natural Gas Prices
- RECS97



## Natural Gas - RECS97 Prices (¢/ccf, in 1997$) % Difference between (Weighted Mean) Marginal Price and Average Price Annual MARGINAL AVERAGE Weighted Mean Range Households Winter 70.1 -4.4% -96.5% to +179.4% wlAcceptable 76.5 Seasonal Prices Non-Winter 63.7 -15.3% -81.6% to +57.9% Households wlo Acceptable Seasonal Prices 66.4 82.4 -14.5% -90.8% to +33.7% All Households 66.0 78.5 -12.6% Note for Tables 1 and 2: For any household, a negative percent difference between marginal price and average price indicates that the household's marginal price is smaller than the household's average price. A positive percent difference between marginal price and average price indicates that the household's marginal price is largerthan the household's average price.



### 2

## Refinements to LBNL's Maryinal Price Estimation Process For RECS97,

### LBNLmade several refinements to its marginal price estimation process in the following areas: seasonal prices for gas aswell as electric criterion for accepting regression line slopes source ofaverage household prices Each ofthese threerefinements is explained below. 1) 

### Seasonal prices for gas

### as well aselectric: ForRECS97, natural gasbilling data was split into seasons in a manner parallel to electricity data. The "peak" winter seasonwas defined as those billing periods whose midpoint fell in any of the following four months: November, December, January, February. Theremaining eight months constitute the non-winter season. For RECS93, natural gasprices were estimated on an annual basis only; that is, seasonal data were not examined. 2) Criterion for acceptingregression line slopes: For RECS97, the criterion for accepting regression line slopes as marginal prices was established using an

## i! cutoff of 0.90. That is, regression slopes ofhousehold billing data were not accepted ashousehold marginal prices unless the

### 2 value was at least 0.90. This criterion was used with both the electricity and natural gas billing data. For RECS93,the criterion for accepting regression line slopes was based on rejecting extremevalues ofthe regression slopesthemselves. For electricity, regression line slopes were rejected if they were either less than orequal to zero or if they were greaterthan 22 centslkwh. Fornatural gas,regression line slopes were rejected ifthey were either less than or equal to zero orif they were greaterthan $3.20ltherm. 3) Source of averagehousehold prices: For RECS97, average prices were calculated for each RECShousehold using the available billing data for that household. Those average prices were then used to calculate thepercent difference between marginal price and averageprice for that household. Weighted means ofthe percent difference between marginal price and averageprice were also calculated for the set of households with acceptable seasonal prices, the set of households without acceptable seasonal prices, and for all of the households. For RECS93, the average price reportedin the RECS database for each RECS household was used; individual household average prices were not calculated using the RECSbilling data itself. The average price reported in the RECS database for each household is the averageprice for the local utility, not the household's own average price. Use ofthese reported average prices in the calculation ofthepercent difference between marginal price and average price does not yield asaccurate a value ofthe percent difference between marginal price and average price as does use ofeach household's own directly-calculated average price. 

## Refinements to LBNL's Marginal Price Estimation Process For RECS97, LBNL made several refinements to its marginal price estimation process in the following areas: seasonal prices for gas as well as electric criterion for accepting regression line slopes source ofaverage household prices Each ofthese three refinements is explained below. 1) Seasonal prices for gas as well as electric: ForRECS97, natural gas billing data was split into seasons in a manner parallel to electricity data. The "peak" winter season was defined as those billing periods whose midpoint fell in any ofthe following four months: November, December, January, February. The remaining eight months constitute the non-winter season. For RECS93, natural gas prices were estimated on an annual basis only; that is, seasonal data were not examined. 2) Criterion for accepting regression line slopes: For RECS97, the criterion for accepting regression line slopes as marginal prices was established using an 

### f2 cutoffof0.90. That is, regression slopes ofhousehold billing data were not accepted as household marginal prices unless the 

### f2 value was at least 0.90. This criterion was used with both the electricity and natural gas billing data. For RECS93, the criterion for accepting regression line slopes was based on rejecting extreme values ofthe regression slopes themselves. For electricity, regression line slopes were rejected ifthey were either less than orequal to zero or ifthey were greater than 22 cents/kWh. Fornatural gas, regression line slopes were rejected ifthey were either less than or equal to zero orifthey were greater than $3.20/therm. 3) Source ofaverage household prices: For RECS97, average prices were calculated for each RECS household using the available billing data for that household. Those average prices were then used to calculate the percent difference between marginal price and average price for that household. Weighted means ofthe percent difference between marginal price and average price were also calculated for the set ofhouseholds with acceptable seasonal prices, the set of households without acceptable seasonal prices, and for all ofthe households. For RECS93, the average price reportedin the RECS database for each RECS household was used; individual household average prices were not calculated using the RECS billing data itself. The average price reported in the RECS database for each household is the average price for the local utility, not the household's own average price. Use ofthese reportedaverage prices in the calculation ofthe percent difference between marginal price and average price does not yield as accurate a value ofthe percent difference between marginal price and average price as does use ofeach household's own directly-calculated average price.



### 3

## MarginalEner~v Prices -

## Surnrnarv ofRECS93 Results. Re-calculated UsingLBNL's 

## Refined Mar~inal Price Estimation Method For comparison purposes, we have re-calculated marginal and average prices and thepercent differencebetween marginal price and average price for the RECS93 households using ourrefined marginal price estimation process. Table

### 3.I Marginal Residential Electricity Prices

# - RECS93 *:,:AT Dl7PC0'2 

## Electi lury

## - 1WLU7J A 

## . . 

# --- , r, 

### ..

### -., (Weighted Mean)Annual

The factorthat converts electricity prices in 1993$to electricity prices in 1997$is 1.013. Prir~c (d/kWh) 

### %

### Differencebetween Marginal Price andAverage Price

Table 4. 

### Marginal Residential Natural Gas Prices

# - RECS93 I I I I



### Households w1Acceptable Seasonal Prices Summer Non-S~mmer

- - 

### Thefactor that converts natural gasprlces In 1993$to natural gaspr~ces In 1997$IS 

### 1.127. MARGINAL

Households w/o Acceptable Seasonal Prices All Households

Note for Tables 3 and 4: For any household, a negative percent difference between marginal price and average price indicates that the household's marginal price is smaller than the household's average price. A positive percent difference between margnal price and average price indicates that the household's marginal price is larger than the household's average price. 1993$ 9.0 8.5 8.7 8.7


## Natural Gas -

## RECS93 1997$ 9.1 8.6 8.8 8.8 AVERAGE

Households wlAcceptahle SeasonalPrices Weighted 

### M~~~ -2.0% -8.6% -5.3% -6.1% 

### 1993$

9.2
9.2 9.2

Prices (#/ccf) (Weighted 

### Mean)

Wlnter Non-Wlnter Range -239.4% to +176.7%

-72.2% to+70.5% -76.6% to+136.4% 1997$

9.4
9.3 9.4

%

### Differencebetween Marglnal Price andAverage Price

Households wlo Acceptable Seasonal Prices All Households Wetghted 

### M~~~ -10.2%

- 

### MARGINAL Range -79.7% to +54.2% Annual AVERAGE 1993$ 57.9 55.1 57.6 56.3 19938
65.8
71.4 66.9 1997$ 65.2 62.1 64.9 63.5 1997$
74.1
80.5 75.3 -14.7% -14.1% -13.4% --78.9% to+38.0% -89.0% to+27.5% 

## Marginal Energy Prices - Summary ofRECS93 Results, Re-calculated Using LBNL's Refined Marginal Price Estimation Method For comparison purposes, we have re-calculated marginal and average prices and the percent difference between marginal price and average price for the RECS93 households using ourrefined marginal price estimation process. 

### Table 3. Marginal Residential Electricity Prices - RECS93



## Electricity - RECS93 Prices (¢/kWh) % Difference between (Weighted Mean) Marginal Price and Average Price Annual MARGINAL AVERAGE Weighted 1993$ 1997$ 1993$ 1997$ Mean Range Households Summer 9.0 9.1 -2.0% -239.4% to +176.7% 

### wi

Acceptable 9.2 9.4 Seasonal Prices Non-Summer 8.5 8.6 -8.6% -72.2% to +70.5% Households 

### w/o Acceptable Seasonal Prices 8.7 8.8 9.2 9.3 -5.3% -76.6% to +136.4% All Households 8.7 8.8 9.2 9.4 -6.1%



## . . The factor that converts electnclty pnces In 1993$ to electncltypnces In 1997$ IS 1.013. 

### Table 4 Marginal Residential Natural Gas Prices - RECS93



## Natural Gas - RECS93 Prices (¢/cct) % Difference between (Weighted Mean) Marginal Price and Average Price Annual MARGINAL AVERAGE 1993$ 1997$ 1993$ 1997$ Weighted Mean Range Households Winter 57.9 65.2 -10.2% -79.7% to +54.2% w/Acceptable 65.8 74.1 Seasonal Prices Non-Winter 55.1 62.1 -14.7% --78.9% to +38.0% Households 

### w/o Acceptable Seasonal Prices 57.6 64.9 71.4 80.5 -14.1% -89.0% to +27.5% All Households 56.3 63.5 66.9 75.3 -13.4% The factor that converts natural gas prices in 1993$ to natural gas prices in 1997$ is 1.127. Note for Tables 3 and 4: For any household, a negative percent difference between marginal price and average price indicates that the household's marginal price is smaller than the household's average price. A positive percent difference between marginal price and average price indicates that the household's marginal price is larger than the household's average price.



### 4