Job Market Paper
Making the Best of the Second-Best: Welfare Consequences of Time-Varying Electricity Prices
This paper examines the extent to which small commercial and industrial establishments respond to a four-hour increase in retail electricity prices invoked by individual utilities during peak demand periods 15 times per year. This policy is intended to reduce electricity consumption when generation costs are highest. I find that the approximately tripled prices reduce establishment peak electricity usage by 13.4%. Using a model of capacity investment decisions, I find the program delivers 43% of the benefits of the first-best policy of continuously varying prices and suggest two simple improvements in program design that could nearly double these welfare gains.
Works in Progress
Energy efficiency savings in low-income households: Evidence from the California Energy Savings Assistance Program
Energy efficiency policies are increasingly used to both save on energy bills and as a carbon mitigation strategy. Mandatory energy efficiency standards are an important part of this strategy, and have significantly increased appliance efficiency over the last 40 years. This paper examines the California Energy Savings Assistance program, which provides no-cost upgrades to low-income households across the state. Much of this program involves replacing older lighting and appliances with new, energy-efficient models. I use quasi-experimental variation in program uptake to measure energy savings for retrofitted San Diego Gas & Electric customers between 2007 and 2012, finding the program provides little savings. I examine the impact of minimum efficiency standards for the households that received a replacement refrigerator, finding large energy savings when moving from an old standards regime to a new one. Using variation in refrigerator replacement rules, I find evidence of a decreasing benefit from each successive wave of standards, highlighting the potentially limited effectiveness of future minimum appliance standards.