A novel billing approach for fair and effective demand side management: Appliance level billing (AppLeBill)

•Appliance level billing (AppLeBill) is proposed for demand response programs. The main contribution of the proposed strategy is the individual billing of time-shiftable appliances (TSAs) when scheduled and controlled by smart demand side management (SDSM) system.•The proposed AppLeBill concept has three schemes which are explained and simulated.•Both customers and electric utilities get benefits via proposed system.•Appliance level billing will be a reference for further studies on smart grids. Demand side management (DSM) is an important part of smart electrical grid studies due to high energy efficiency it provides. Effective DSM techniques are hinged on participation level of the customers and control manner of their loads so if there is no fair and appropriate management, customers will not embrace demand side management applications. Besides, the customers might not participate to the demand response process willingly if their comforts are not considered. Therefore, the DSM systems must consider fairness and customer’s comfort as well as distribution system objectives. Multifarious DSM systems have been proposed in the literature, however, the fair billing has not included as a parameter in most of these studies. This paper introduces a novel billing approach based upon appliance level billing (AppLeBill) for fair and effective demand side management. The proposed AppLeBill idea offers a billing strategy such that time-shiftable appliances (TSAs) in a residence may have a separate billing rate rather than a single billing rate for total electricity usage. The proposed AppLeBill concept includes three different schemes which are explained and simulated in order to compare each other in terms of their potential benefits.