#TheEffectsOfStateEnergyPolicyOnResidentialElectricEnergyBurden

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Nick Dahlberg: UEP Thesis Award Nominee, 2019

The Effects of State Energy Policy on Residential Electric Energy Burden

Nick Dahlberg’s thesis explores how state and federal energy policy impacts household budget spending on energy.  He constructs a sophisticated statistical model using data from 105 private, investor-owned electric utilities across a two-decade period to test the hypothesis that energy policies have increased the amount spent per household on electric energy.  His findings build upon previous research in the field of energy economics to identify an increasing burden on household budgets related to energy policy over time. This is a well written thesis that lays out a very complicated topic in a clear and concise way. It is exceptional for its rigor in advanced quantitative methods.

Abstract

This thesis examines how state level energy efficiency resource standards (EERS), renewable portfolio standards (RPS), and electric sector deregulation have affected US households’ energy burden. 

“Energy burden” represents the percentage of household income that is spent on energy for domestic use, and this analysis defines a related metric that is specific to electric purchases. The study posits that most policies have increased electric energy burden and employs fixed effects panel regression techniques to test this hypothesis across 105 private, investor-owned electric utilities and twenty-two years. Utilities’ geographic service territories are the analytical units, and a typical household’s electric energy burden is estimated for each utility in each year. The results suggest all three policies are associated with increases in electric energy burden over time, which corroborates previous research that examined electricity prices only. The study concludes with a discussion of avenues for future research that would expand upon these results.