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Consider a smart grid system in which every user may or may not choose to participate in Demand Side Management (DSM). This will lead to a general co-existence problem between participant and non-participant users. To gain insights, first, the authors show that some existing electricity billing mechanisms suffer from severe fairness and co-existence defects. Next, they propose an alternative billing mechanism that can tackle the coexistence and fairness problems by taking into account not only the users' total load, but also the exact shape of their load profiles. Their analytical results provide mild sufficient conditions on the choice of system parameters to assure fairness. Furthermore, their simulation results confirm that the proposed billing mechanism significantly improves the fairness index of the DSM system.
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