Do Renewables Portfolio Standards Increase Electricity Prices? A Synthetic Control Approach
AbstractWe examine whether state level Renewable Portfolio Standards (RPS) influence prices in the electricity market. While vital environmental goals underlie the rationale for RPS there exists a potential for negative welfare impacts through increased costs of electricity generation forcing consumers to allocate a larger portion of their income to energy consumption. We employ the Synthetic Control Method (SCM) for comparative case study and focus on Texas, an early adopter of RPS and arguably a success story. We find that RPS increased residential, industrial and total electricity prices while commercial prices were unaffected.
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Bibliographic InfoPaper provided by Oklahoma State University, Department of Economics and Legal Studies in Business in its series Economics Working Paper Series with number 1403.
Length: 34 pages
Date of creation: Jun 2013
Date of revision: Aug 2013
Renewable portfolio standard; electricity price; synthetic control method;
Find related papers by JEL classification:
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- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
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