Energy consumption, Electric utilities, Supply & demand, Power resources, Microeconomics, Prices, Government policy, Electric power, Energy demand management, Electricity, and Electric power consumption
In the mid-1990s, California was the first U.S. state to fundamentally change the way in which its electricity supply was regulated. In order to achieve competition on the electricity market, production and transportation were separated and electricity exchanges were set up. Following the introduction of the reforms, electricity prices initially fell somewhat for most consumers. This was considered a success of deregulation. In the summer of 2000 and again in the following winter, however, wholesale prices on the electricity exchange rose drastically. In mid-January 2001, electricity demand out-stripped available capacities, so that the power supply of many consumers had to be cut. In addition to the conceptional problems of deregulaion, a series of other factors also contributed to this development, such as under-estimating economic growth, the increase in electricity consumption in the second half of the 1990s, the elaborate and time-consuming approval procedures for power stations and insufficient incentives to save electricity. In Europe, the starting position is more advantageous than it was in California, but here, too, deregulation of the electricity supply could contribute to reducing capacity reserves and thereby to endangering the security of the power supply.
Demand (Economic theory), Econometrics, Elasticity (Economics), Time series analysis, Prices, Electric power consumption, Electricity, and Households
Measurement of residential demand for electricity has taken on increased importance with the rapid increase in real energy prices and the identification of the electricity sector as a central focus of energy policymaking. Reliable analysis of proposals to revise electricity rate structures and projections of future supply needs must be based on quantitative judgments about price and income elasticities as well as the effects of other major variables. To date, virtually all econometric studies of household demand have used aggregate time-series or cross-section data and some measure of the average residential price per kilowatt -hour of electricity. Because the marginal price per unit of electricity is not constant under the declining-block rates used by utilities, such studies may contain biases that can be especially serious when analyzing the effect of any change in rate structure. The empirical research reported in the article is based on micro-level data for 3825 geographic areas throughout the county of Los Angeles, California. By adopting this disaggregated approach to estimating demand equations, authors are able to measure the marginal price faced by households, control for eight major appliances, and include the important influence of weather.