Abstract: The traditional time-of-use price policy ignores the user’s willingness. And the modeling of users’ response behavior does not consider the cost for users’ adjustment of electricity consumption, and the range of users cannot be selected theoretically. Therefore, this paper proposes an optimal time-of-use price strategy for selecting user's range based on cost. The relationship between the extra cost generated by the user's adjustment of electricity consumption behavior and the saved electricity consumption cost is analyzed. Then a model for electricity price and electricity response behavior under the time-of-use electricity price mechanism is derived. When the user's production cost after changing the electricity consumption behavior is higher than the price before the time-of-use price is implemented, the user's willingness to participate in the time-of-use price policy is evaluated as zero, and the user is not included for implementation of the time-of-use electricity price. The simulation and experimental results show that compared with the traditional time-of-use electricity price model that does not select the customer's range, the proposed model can reflect the adjusting process of user’s electricity consumption behavior, and can scientifically select the use’s range to participate in the time-of-use electricity price policy, and can achieve the best total benefits for the power grid and users.

Key words: time-of-use price, customer's behavior, customer's cost, customer's range, social welfare