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Do Renewables Portfolio Standards Increase Electricity Prices? A Synthetic Control Approach

Listed author(s):
  • Karen Maguire

    ()

    (Oklahoma State University)

  • Abdul Munasib

    ()

    (University of Georgia)

We 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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File URL: https://business.okstate.edu/site-files/docs/ecls-working-papers/OKSWPS1403.pdf
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Paper provided by Oklahoma State University, Department of Economics and Legal Studies in Business in its series Economics Working Paper Series with number 1403.

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Length: 34 pages
Date of creation: Jun 2013
Date of revision: Aug 2013
Handle: RePEc:okl:wpaper:1403
Contact details of provider: Web page: http://spears.okstate.edu/ecls-working-papers/

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  17. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  18. Langniss, Ole & Wiser, Ryan, 2003. "The renewables portfolio standard in Texas: an early assessment," Energy Policy, Elsevier, vol. 31(6), pages 527-535, May.
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