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Abstract
Sustainable electricity supply has come to the forefront of current affairs in the U.S. Thepower grid of the future requires significant system-level upgrades to an outdatedinfrastructure. A combination of new technology and new energy management strategieswill be necessary. An important topic of discussion is Demand Response (DR), and usuallycoupled with it is Real-Time Electricity Pricing (RTP). The former refers to electricityusers' reducing their demand, often receiving some kind of benefit in exchange, whichtheoretically helps grid reliability during system stress and levels out market prices. Thelatter refers to the grid's pricing electricity based on current generation, which theoreticallyallows for more accurate price effects. Through analyzing a model of industrialload-shifting as a demand response method employed by a customer with day-aheadreal-time pricing, this paper demonstrates the economic welfare benefits that can accruefrom real-time pricing and demand response in modern power systems.