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Determinants of voluntary electricity demand management program participation

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  • Leonard, J. Mark
  • Decker, Christopher S.

Abstract

This paper examines the voluntary electricity demand management decisions of commercial and industrial customers (at the firm and facility level) of an electric utility serving a United States Midwestern metropolitan area. Using standard probit analysis, we find that electricity costs are a major determinant of a firm’s decision to voluntarily engage in demand management programs. Specifically, an additional $100,000 in electricity costs raises the probability of participation in an electricity demand management program by 0.3 percent. We also find that companies with multiple sites are 3.7 percent more likely to participate. In terms of demand management program participation, these results indicate a difference between organization and size that warrants further examination.

Suggested Citation

  • Leonard, J. Mark & Decker, Christopher S., 2012. "Determinants of voluntary electricity demand management program participation," Utilities Policy, Elsevier, vol. 20(1), pages 17-21.
  • Handle: RePEc:eee:juipol:v:20:y:2012:i:1:p:17-21
    DOI: 10.1016/j.jup.2011.10.001
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    References listed on IDEAS

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    1. Khanna, Madhu & Damon, Lisa A., 1999. "EPA's Voluntary 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 1-25, January.
    2. Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
    3. Laura Hartman & Robert Rubin & K. Dhanda, 2007. "The Communication of Corporate Social Responsibility: United States and European Union Multinational Corporations," Journal of Business Ethics, Springer, vol. 74(4), pages 373-389, September.
    4. Alan Collins & Richard I. D. Harris, 2002. "Does Plant Ownership Affect the Level of Pollution Abatement Expenditure?," Land Economics, University of Wisconsin Press, vol. 78(2), pages 171-189.
    5. Seema Arora & Timothy N. Cason, 1996. "Why Do Firms Volunteer to Exceed Environmental Regulations? Understanding Participation in EPA's 33/50 Program," Land Economics, University of Wisconsin Press, vol. 72(4), pages 413-432.
    6. Michael Peters & Kerry Turner, 2004. "SME environmental attitudes and participation in local-scale voluntary initiatives: some practical applications," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 47(3), pages 449-473.
    7. J Videras & A Alberini, 2000. "The appeal of voluntary environmental programs: which firms participate and why?," Contemporary Economic Policy, Western Economic Association International, vol. 18(4), pages 449-460, October.
    8. Madhu Khanna & William Rose Q. Anton, 2002. "Corporate Environmental Management: Regulatory and Market-Based Incentives," Land Economics, University of Wisconsin Press, vol. 78(4), pages 539-558.
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    Cited by:

    1. Earnhart, Dietrich & Mark Leonard, J., 2016. "Environmental audits and signaling: The role of firm organizational structure," Resource and Energy Economics, Elsevier, vol. 44(C), pages 1-22.
    2. Carrión-Flores, Carmen E. & Innes, Robert & Sam, Abdoul G., 2013. "Do voluntary pollution reduction programs (VPRs) spur or deter environmental innovation? Evidence from 33/50," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 444-459.
    3. Torriti, Jacopo, 2013. "The significance of occupancy steadiness in residential consumer response to Time-of-Use pricing: Evidence from a stochastic adjustment model," Utilities Policy, Elsevier, vol. 27(C), pages 49-56.
    4. Bjoern Felten & Jessica Raasch & Christoph Weber, 2017. "Photovoltaics and Heat Pumps - Limitations of Local Pricing Mechanisms," EWL Working Papers 1702, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Feb 2017.

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