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Economic policy, Transfer payments, Externalities, Energy demand management, and Electricity

Economies across the globe are becoming increasingly cashless and many payment systems have become automated, driving a temporal wedge between consumption and payment and generally making the costs of consumption intermittently salient. Since this inconsistent price salience alters demand elasticities, it is a particular concern for goods that generate externalities and the price-based policies deployed to address them. This paper derives optimal dynamic corrective taxes for suboptimal and persistent consumption decisions. These taxes depend on the agent's ability to commit to a future consumption path. We also characterize a second-best constant tax and the excess burden from time-invariant tax rates. When calibrated to U.S. residential electricity consumption, the model shows that the second-best constant tax is more than twice the marginal external cost of carbon emissions. [ABSTRACT FROM AUTHOR]

Accounting, Electric utilities, and Electricity

This paper theorizes accounting’s role in realizing the state’s political ambitions. It triangulates Dillard et al.’s (2004) institutional theory framework with historical institutionalism in order to trace the institutional layers and political processes that connect micro-organizational changes with ideological transformations within the political state. Data comes from an ‘extended case study’ comprising a three-month fieldwork into an Egyptian electricity company’s cost management practices and an extensive review of secondary materials on Egypt’s electricity-sector reforms. Empirical findings provide insights into the ways in which accounting plays a political role in institutionalizing structural reforms and how that role evolves with the political ideologies of the state. Accounting’s political role during the colonial regime was speculation of commercial and scientific gains, while it was signification of centralized political power during the postcolonial military regime. Accounting’s role during the neoliberal regime was paradoxical – simultaneously a reformation technology and a deficient institutional apparatus that hindered privatization. Accounting takes political meanings when it institutionalizes the state’s reformative ideologies. Accounting makes the connections between the macro-political and micro-organizational. [ABSTRACT FROM AUTHOR]

Electrification, Air pollution prevention, Electricity, Households, and Respiratory diseases

This paper provides the first experimental evidence that household electrification leads to substantial reductions in indoor air pollution. Two years after electricity rollout, we measured overnight fine particulate matter ( PM 2.5 ) concentration, which was on average 66% lower among households that were randomly encouraged to connect to the electrical grid compared to those that were not. As a result, prevalence of acute respiratory infections among children under six was 8-14 percentage points lower in the former group. We find suggestive evidence that these changes are at least partly driven by reductions in kerosene use. [ABSTRACT FROM AUTHOR]

Electric rates, Electricity, and Electric power consumption

In this paper, we quantify the difference between public and private prices of residential electricity immediately before and after major federal reforms in the 1930s and 1940s. Previous research found that public prices were lower in a sample of large, urban markets. Based on new data covering over 15,000 markets and nearly all electricity generated for residential consumption, we find that the difference between public and private prices was small in 1935 and negligible in 1940 for typical levels of monthly consumption. These findings are consistent with a market for ownership that helped to discipline electricity prices during this period. That is, private rents were mitigated by the threat that municipalities would use public ownership to respond to constituent complaints and public rents were limited by electoral competition and the growth of private provision. [ABSTRACT FROM AUTHOR]

Renewable energy sources, Consumers, Economic impact, Economics, Electricity, Green products, and Australia -- Economic conditions -- 1945-

Green electricity products are increasingly made available to consumers in many countries in order to address a number of environmental and social concerns. Most of the literature on this green electricity market focuses on consumers’ characteristics and product attributes that could affect participation. However, the contribution of this environmental consumerism to the overall environmental good does not depend on participation alone. The real impact relies on market participation for green consumers (the proportion of green consumers) combined with the level of green consumption intensity – the commitment levels, or proportion of consumption that is green. We design an online interface that closely mimics the real market decision environment for electricity consumers in Western Australia and use an error component model to analyze consumers’ choice of green electricity products and their commitment levels. We show that product attributes have limited impact on the choice of green products; however, there is still great potential for better participation by improving the design of green electricity programs. When green products are selected, most respondents select the minimum commitment possible, and this is insensitive to the premium being charged on green power, suggesting that we are largely observing a buy-in ‘warm glow’ for carbon mitigation. [ABSTRACT FROM AUTHOR]

Energy consumption, Market volatility, Service level agreements, Load balancing (Computer networks), Cloud computing, and Electricity

This paper consider the case of a cloud service provider (CSP) who owns multiple geographically distributed data centers, with collocated sources of renewable energy. We investigate load distribution strategies to minimize electricity cost and increase renewable incorporation subject to compliance with service level agreement (SLA), considering the adverse effects of switching the servers. Our work provides some insights on the performance of different algorithms for geographical load balancing (GLB) in terms of electricity cost, renewable energy integration and number of server switching. Our proposed strategies incorporate a new way of capturing the server switching cost. We show that, instead of modeling switching cost through a linear function, the proposed technique of modeling switching cost through variance achieves a better tradeoff between some important parameters. Since the three major input parameters-electricity price, renewable energy and number of job requests-vary over time, the average cost of electricity per job request may also exhibit dramatic fluctuations. We propose to tackle this volatility by controlling the average cost of electricity per job request through leveraging contracts in the forward electricity market, and determine the optimal amount of electricity to be procured in the forward electricity market. We show that our proposed strategy substantially reduces the variance of the average cost of electricity per job and that this price risk mitigation is achieved with a decrease in the cumulative electricity cost. [ABSTRACT FROM AUTHOR]

Durable consumer goods, Supply & demand, Consumer behavior, Electricity, Dynamic models, and Household appliances

I estimate a dynamic structural model of demand for air conditioners, the most energy-intensive home appliance in the US. The model explores the links between demand for durable goods and expected changes in key attributes: energy efficiency and price. I incorporate expectations explicitly as a feature of the choice setting, and use parameter estimates from the model to calculate durable good demand elasticities with respect to energy efficiency, electricity price, and price of the durable itself. These estimates fill a large gap in the literature, and also shed light on consumer behavior in this setting. Results indicate that consumers are forward-looking and value the stream of future savings derived from energy efficiency. [ABSTRACT FROM AUTHOR]

Energy consumption, Information theory, Information sharing, School year, and Observation (Scientific method)

Abstract: Environmental damage is often an unseen byproduct of other activities. Disclosing environmental impact privately to consumers can reduce the costs and/or increase the moral benefits of conservation behaviors, while publicly disclosing such information can provide an additional motivation for conservation - cultivating a green reputation. In a unique field experiment in the residence halls at the University of California – Los Angeles, we test the efficacy of detailed private and public information on electricity conservation. Private information was given through real-time appliance level feedback and social norms over usage, and public information was given through a publicly visible conservation rating. Our analysis is based on 7,120 daily observations about energy use from heating and cooling, lights and plug load for 66 rooms collected over an academic year. Our results suggest that while private information alone was ineffective, public information combined with private information motivated a 20 percent reduction in electricity consumption achieved through lower use of heating and cooling. Public information was particularly effective for above median energy users. [Copyright &y& Elsevier]

Cost effectiveness, Electric rates, Renewable portfolio standards, Electric generators, Intermittency (Nuclear physics), and Electric power systems

Abstract: Renewable electricity policies promote investment in renewable electricity generators and have become increasingly common around the world. Because of intermittency and the composition of other generators in the power system, the value of certain renewable – particularly wind and solar – varies across locations and technologies. This paper investigates the implications of this heterogeneity for the cost effectiveness of renewable electricity policies. A simple model of the power system shows that renewable electricity policies cause different investment mixes. Policies also differ according to their effect on electricity prices, and both factors cause the cost effectiveness to vary across policies. We use a detailed, long-run planning model that accounts for intermittency on an hourly basis to compare the cost effectiveness for a range of policies and alternative parameter assumptions. The differences in cost effectiveness are economically significant, where broader policies, such as an emissions price, outperform renewable electricity policies. [Copyright &y& Elsevier]

Tax evasion, Environmental impact charges, Income tax, Government revenue, Taxation, Gasoline taxes, and Electricity

Abstract: This paper introduces a new argument to the debate about the role of environmental taxes in modern tax systems. Some environmental taxes, particularly taxes on gasoline or electricity, are more difficult to evade than taxes on labor or income. When the tax base is shifted in a revenue-neutral manner toward these environmental taxes, the result is a net reduction in the amount of tax evasion. Using a carbon tax as a motivating example, the “tax evasion effect” is shown to sharply reduce the welfare cost of controlling emissions. A simple computable general equilibrium model suggests that the impact of considering tax evasion can be large: costs are lowered by 28% in the United States, by 89% in China, and by 97% in India. In countries with high levels of pre-existing tax evasion, a carbon tax will pay for itself through improvements in the efficiency of the tax system. [Copyright &y& Elsevier]

Socioeconomics, Renewable energy sources, Electric power production, Industrial capacity, Electricity, and Policy sciences

Abstract: The ability to store excess intermittent renewable electricity is increasingly being seen as a key option for integrating large quantities of renewable capacity. However, intermittent energy sources currently account for very small amounts of total generation. Despite this fact, policymakers have begun implementing requirements that will dramatically increase the amount of bulk storage capacity. This paper examines the social benefits provided by bulk storage in the Texas electricity market, which has a large amount of renewable capacity relative to other states, but still quite limited renewable penetration. We focus on the impact of arbitraging electricity across time—a major service of bulk storage. Using current storage technologies, we demonstrate that electricity arbitrage will increase daily CO2 emissions by an average of 0.19 tons for each MWh stored. In addition, daily SO2 emissions will increase by an average of 1.89pounds/MWh while NO X emissions will fall by an average of 0.15pounds/MWh. [Copyright &y& Elsevier]

Economics, Labor incentives, Government regulation, Information asymmetry, Industrial costs, Organizational performance, and Corporate profits

Abstract: The determinants of incentive regulation are an important issue in economics. More powerful rules relax allocative distortions at the cost of lower rent extraction. Hence, they should be found where the reformer is more concerned with stimulating investments by granting higher expected profits, and where rent extraction is less necessary since the extent of information asymmetries is more limited. This prediction is consistent with US power market data. During the 1990s, performance based contracts were signed by firms operating in states where generation costs were historically higher than those characterizing neighboring markets and the regulator had stronger incentives to exert information-gathering effort because elected instead of being appointed. [Copyright &y& Elsevier]

Environmental law, Environmental regulations, Electric power plants & the environment, Capital investments, New source performance standards, Coal-fired power plants, Pollution, and Clean Air Act (U.S.)

Abstract: We analyze the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Plants lost their exemptions if they made “major modifications.” We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital investment at vulnerable plants. However, we find no discernible effect on other inputs or emissions. [Copyright &y& Elsevier]

Government policy, Accounting laws, Economic demand, Stockholders, Public officers, Voting, and Elections

Abstract: A key market institution is the degree of accountability to which the officials involved in regulation are exposed. While elected officials strive for re-election, appointed ones are career-concerned. Provided that the effort exerted to uncover the firm’s unknown cost is sufficiently effective in swaying votes, elected officials produce more information than appointed ones do. As a result, when the demand is inelastic, appointment induces wider allocative distortions and higher profits which, in turn, yield stronger incentives to invest. Hence, appointment will prevail on election when investment inducement is sufficiently relevant and shareholders are sufficiently more powerful than consumers. Data on electricity rates and costs, and the methods of selecting regulators and appellate judges for a panel of forty-seven US states confirm these predictions. [Copyright &y& Elsevier]

Infrastructure (Economics), Economic development, Railroads, Investments, Estimation theory, Rate of return, and Electricity

Abstract: This paper considers the development of the electricity, highway, and railway sectors in China, with special emphasis on investment incentives. Statistical summary of the development of these sectors is offered, followed by a detailed description of the institutional background, including investment and pricing mechanisms. We also analyze investment incentives based on the institutional background and present our estimates of the rates of return to investment in these sectors. It is observed that some of the current practices may serve as useful transitional arrangements even though they are not desirable in the long run. [Copyright &y& Elsevier]

Organizational change, Organizational structure, Power resources, and Electricity

Abstract: This paper demonstrates the usefulness of theoretical triangulation in exploring a case study of accounting and organizational change at the Electricity Trust of South Australia (ETSA). Two theories are used, structuration as developed by Giddens and Laughlin''s framework developed as a middle-range theory based on Habermas. These two theories complement each other but have significant differences. In accounting, Laughlin has been an advocate of middle range theory, and although his framework may appear dominant in exploring accounting and organizational change , alternative theoretical perspectives may draw out richer insights about the way accounting is involved in organizational change. Using the middle-range theory of organizational change, the accounting system at ETSA is perceived as enabling change but viewed in a favourable way; an outcome which is different to most of the previous research using this model and hence an important contribution to the literature. The counting that was viewed negatively was the counting of people, not dollars. This theory enables the exploration of the change process and how accounting is implicated. The second theoretical perspective, Gidden''s concept of structuration, provides richer insights from the dimensions of domination and legitimation. Domination brings to the fore the role of accounting in control as a power device, which is not explicit using the Laughlin framework. Legitimation clarifies what is “moral” as organization''s change. I demonstrate how a different theoretical lens enables different insights, not achievable by using a single approach. [Copyright &y& Elsevier]

Environmental law, Banking industry, Air quality standards, and Electricity

Presents a model of the collective emission permit banking behavior of electricity-generating units affected by the Clean Air Act Amendments of 1990 in the United States. Introduction of a treatment constraints on pollution permits; Impact of the permit on electricity demand, regulations and technologies; Implications of the permit for the banking behavior.

Computers and Obsolescence

We model Moore''s law as efficiency of computer producers that rises as a by-product of their experience. We find the following: (1) Because computer prices fall much faster than the prices of electricity-driven and diesel-driven capital ever did, growth in the coming decades should be very fast. (2) The obsolescence of firms today occurs faster than before, partly because the physical capital they own becomes obsolete faster. Journal of Economic Literature Classification Number: O3. [Copyright &y& Elsevier]

Accounting, Regulatory reform, Organizational change, Deregulation, Economic policy, Electric utilities, and Electricity

This paper reports on the results of an intensive case study that investigated changes in the accounting and financial information system of a large Spanish electricity company (Sevillana). Sevillana was acquired by the Endesa Group upon the deregulation of the Spanish electricity sector (SES). Drawing on data from multiple sources including interviews, observations, discussions and documents, the paper aims to theorize the change in the accounting and financial information system. An integrated accounting and financial information system was imposed by the Endesa head office on Sevillana and other Endesa subsidiaries to support organizational changes designed in response to regulatory requirements. The institutional environment also interacted with market forces and intra-organizational power relations to either directly or indirectly influence the changes in the accounting and financial information system. Given the interplay between these forces, the paper draws on and extends the New Institutional Sociology (NIS) theory [DiMaggio, P.J., Powell, W.W., 1983. The iron cage revisited: institutional isomorphism and collective rationality in organizational fields. Am. Sociol. Rev. 48, 147–160; Powell, W.W., DiMaggio, P.J., 1991. The New Institutionalism in Organizational Analysis. The University of Chicago Press, pp. 183-203] to understand the dynamics of the change. [Copyright &y& Elsevier]

Economics, Markets, and Electricity

This paper examines the effects of imperfect competition in unregulated electricity markets from a general equilibrium perspective, and demonstrates that horizontal market power can explain both the large peak-period price spikes observed recently in California and elsewhere, and the marked reduction in addition to capacity that have also occurred during the transition to competitive markets. [Copyright &y& Elsevier]