Analysis of interruptible service mechanisms has focused on the effici
ency losses due to the absence of complete contingent contracts. There
exists a second type of inefficiency which, to a large extent, has be
en ignored. It originates from the fact that the relative order, or ra
nking, of consumers' willingness to pay for a given quantity generally
varies throughout the contract period. A more general model of electr
icity demand allowing for changes in the order of consumer willingness
to pay for a given quantity is presented. Under such demand condition
s, the use of a two-stage rationing mechanism is proposed. Rationing p
lans which maximize expected aggregate surplus are established in the
first stage. The second stage consists in a market for allocation righ
ts to be operated once the states of nature are revealed. Allocations
under this two-stage mechanism are shown to be Pareto-superior to exis
ting rationing plans. Directions for future research are discussed.