Multi-level Scoring Rule Application for Smart Pricing Scheme

This paper presents an incentive based smart dynamic pricing scheme for consumers facilitating a hierarchical scoring mechanism. This mechanism is applied between consumer agents (CA) to electricity provider agent (EP) and EP to Generation Company (GENCO). Based on the Continuous Ranked Probability Score (CRPS), a hierarchical scoring system is formed among these entities. As CA receives the dynamic day-ahead pricing signal from EP, it will schedule the household devices to lower priced-period and report the prediction in a form of Gaussian Distribution to EP. Similarly, EP, reports the aggregated demand prediction to GENCO. Finally, GENCO computes the base discount after running a cost-optimization problem. GENCO will reward EP with a fraction of discount based on their prediction accuracy. EP will do the same to CA based on how truthful they were reporting their intentions on device scheduling. The method is tested on real data provided by Ontario Power Company.