Interruptible tariffs are contractual arrangements set up between the utility and large non-residential customers. Customers agree to reduce their electrical consumption to a pre-specified level, or by a pre-specified amount, during system reliability problems in return for an incentive payment or a similar rate
20
discount. Customers are given the incentive regardless of whether reliability events are called. In the past, these programs were developed mostly for customer retention as the utilities assured customers that reliability events were so rare and would never be called. However, as reliability problems are becoming more acute, utilities are calling more interruptible events. As a result, many customers are opting to negotiate an exit to their contractual obligations for these programs as they cannot tolerate the volume interruptions to their businesses.