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Pass-through in residential retail electricity competition: Evidence from Pennsylvania

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  • Simeone, Christina E.
  • Lange, Ian
  • Gilbert, Ben

Abstract

Public data for Pennsylvania show that competitive retail electricity generation suppliers (EGS) have offered higher-priced products to residential consumers compared to prices offered by regulated default electric distribution companies (EDCs). It is unclear if the EGSs higher prices are due solely to providing differentiated value-added products with higher input costs or if these suppliers are extracting higher markups. This study applies regression analysis to residential retail price data from Pennsylvania to explore this uncertainty. Results suggest EGSs pass-through markups on voluntary green-power product environmental attributes of at least 1.3x or greater, depending on the product type and penetration. These results do not support the hypothesis that higher EGS prices are solely the result of higher input costs and support the notion that higher prices are due in part to markups.

Suggested Citation

  • Simeone, Christina E. & Lange, Ian & Gilbert, Ben, 2023. "Pass-through in residential retail electricity competition: Evidence from Pennsylvania," Utilities Policy, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:juipol:v:80:y:2023:i:c:s0957178722001436
    DOI: 10.1016/j.jup.2022.101479
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    References listed on IDEAS

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