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“No shut-off” policies and natural gas consumption

Author

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  • Clark, David E.
  • Dybicz, Catherine
  • Hanson, Andrew
  • Nourzad, Farrokh

Abstract

Many U.S. states have regulations that prevent natural gas utility companies from turning off service to non-paying consumers. The goal of these policies, termed “no shut-off” (NSO) regulations, is to provide a guaranteed minimum level of residential comfort by reducing the marginal cost of consumption to zero for a period of time. This paper employs a difference-in-difference approach applied to residential U.S. Energy Information Administration data to evaluate whether NSO policies generate higher levels of gas usage. Our preferred specifications suggest that activation of a NSO policy increases natural gas consumption by between 4.7–4.8%, resulting in a total increase of between 66 and 67 billion cubic feet of natural gas consumed per winter season in covered states, at a value of as much as $950–970 million annually.

Suggested Citation

  • Clark, David E. & Dybicz, Catherine & Hanson, Andrew & Nourzad, Farrokh, 2017. "“No shut-off” policies and natural gas consumption," Resource and Energy Economics, Elsevier, vol. 48(C), pages 19-29.
    • Handle: RePEc:eee:resene:v:48:y:2017:i:c:p:19-29
    DOI: 10.1016/j.reseneeco.2017.01.002
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    References listed on IDEAS

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    Cited by:

    1. Pashchenko, Dmitry, 2018. "First law energy analysis of thermochemical waste-heat recuperation by steam methane reforming," Energy, Elsevier, vol. 143(C), pages 478-487.
    2. Girma T. Chala & Abd Rashid Abd Aziz & Ftwi Y. Hagos, 2018. "Natural Gas Engine Technologies: Challenges and Energy Sustainability Issue," Energies, MDPI, vol. 11(11), pages 1-44, October.

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    More about this item

    Keywords

    Natural gas usage; Utility regulation;

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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