[Apornak* et al., 5(9): September, 2016] ISSN: 2277-9655 IC™ Value: 3.00 Impact Factor: 4.116 http: // www.ijesrt.com © International Journal of Engineering Sciences & Research Technology [780] IJESRT INTERNATIONAL JOURNAL OF ENGINEERING SCIENCES & RESEARCH TECHNOLOGY A MODEL FOR DEFINING THE RETAILER’S PROFIT BASED ON LOAD SHIFTING AND TOU PRICING Kourosh Apornak 1 , Faramarz Faghihi 2 , Hossein Mohammadnezhad Shourkaei 3 1 Master Student, Department of electrical engineering, Faculty of Electrical and Computer, Science and Research Branch, Islamic Azad University, Tehran, Iran 2 Assistant Professor, Department of electrical engineering, Faculty of Electrical and Computer, Science and Research Branch, Islamic Azad University, Tehran, Iran 3 Assistant Professor, Department of electrical engineering, Faculty of Electrical and Computer, Science and Research Branch, Islamic Azad University, Tehran, Iran DOI: 10.5281/zenodo.155244 ABSTRACT Deregulation of the electricity market is an important issue in the energy sector. A major aim of deregulation is to increase competition among electricity retailers/suppliers and thereby enrich consumer choice among electricity products Retail energy markets are the final link in the energy supply chain. Energy retailers buy electricity in wholesale markets, package it with transportation services and sell it to customers. This is typically the main interface between the electricity industry, and customers such as households and small businesses. The electricity retailers are simply competing for the right to send a customer a bill, to package up a range of tariffs and lock the customers into a contract, also the opening to competition into retail electricity supply gives the opportunity to consumers to choose their own supplier. This paper analyze the profit of the retailer based on demand response(DR) and participation of customer in DR programs, also in this paper we consider stochastic programming and risk modeling of the retailer by LODA SHIFTING. KEYWORDS: Electricity Retail market, TOU pricing, profit, Risk Modeling, Deregulation INTRODUCTION Electric deregulation is the process of changing rules and regulations that control the electric industry to provide customers the choice of electricity suppliers who are either retailers or traders by allowing competition. Deregulation improves the economic efficiency of the production and use of electricity. Due to competition in the electric industry, the power prices are likely to come down which benefits the consumers. The main objectives of the deregulated power market: • To provide electricity for all reasonable demands. • To encourage the competition in the generation and supply of electricity. • To improve the continuity of supply and the quality of services. • To promote efficiency and economy of the power system. One of the another main of this paper is the use of DEMAND RESPONSE (DR) in power system; Demand response provides an opportunity for consumers to play a significant role in the operation of the electric grid by reducing or shifting their electricity usage during peak periods in response to time-based rates or other forms of financial incentives. Demand response programs are being used by some electric system planners and operators as resource options for balancing supply and demand. Such programs can lower the cost of electricity in wholesale markets, and in turn, lead to lower retail rates. Methods of engaging customers in demand response efforts include offering time- based rates such as time-of-use pricing, critical peak pricing, variable peak pricing, real time pricing, and critical peak rebates. It also includes direct load control programs which provide the ability for power companies to cycle air