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Decoupling and demand-side management: Evidence from the US electric industry

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  • Datta, Souvik

Abstract

This paper examines the impact of revenue decoupling policies on energy efficiency spending by electric utility companies in the US. I identify this impact by using the variation in the implementation of decoupling measures over time and across utility companies in the US. Using individual utility-level data between 2007 and 2011 from the US Energy Information Administration on energy efficiency spending and other utility characteristics I find that decoupled utilities spend, on average, about $16 per customer more on energy efficiency than utilities that have not been decoupled. Therefore, given the increasing importance of energy efficiency as an effective way to reduce the emission of greenhouse gases and an ongoing increase in different regulatory environments of electric utilities, it appears that decoupling policies may be effective instruments to promote energy efficiency spending.

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  • Datta, Souvik, 2019. "Decoupling and demand-side management: Evidence from the US electric industry," Energy Policy, Elsevier, vol. 132(C), pages 175-184.
    • Handle: RePEc:eee:enepol:v:132:y:2019:i:c:p:175-184
    DOI: 10.1016/j.enpol.2019.05.005
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    Cited by:

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    3. Arlan Brucal & Nori Tarui, 2018. "Revenue Decoupling for Electric Utilities: Impacts on Prices and Welfare," Working Papers 201814, University of Hawaii at Manoa, Department of Economics.
    4. von Loessl, Victor & Wetzel, Heike, 2022. "Revenue decoupling, energy demand, and energy efficiency: Empirical evidence from the U.S. electricity sector," Utilities Policy, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Revenue decoupling; Demand-side management; Investor-owned electric utilities; Difference-in-differences;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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