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We provide the first at-scale estimate of electric vehicle (EV) home charging. Previous estimates are either based on surveys that reach conflicting conclusions, or are extrapolated from a small, unrepresentative sample of households with dedicated EV meters. We combine billions of hourly electricity meter measurements with address-level EV registration records from California households. The average EV increases overall household load by 2.9 kilowatt-hours per day, less than half the amount assumed by state regulators. Our results imply that EVs travel 5,300 miles per year, under half of the US fleet average. This raises questions about transportation electrification for climate policy. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

We provide the first at-scale estimate of electric vehicle (EV) home charging. Previous estimates are either based on surveys that reach conflicting conclusions, or are extrapolated from a small, unrepresentative sample of households with dedicated EV meters. We combine billions of hourly electricity meter measurements with address-level EV registration records from California households. The average EV increases overall household load by 2.9 kilowatt-hours per day, less than half the amount assumed by state regulators. Our results imply that EVs travel 5,300 miles per year, under half of the US fleet average. This raises questions about transportation electrification for climate policy.

We exploit newly available microdata on goods movement in the U.S. to model shippers' freight mode choices. Because freight modes have vastly different fuel intensities, shippers' choices have large implications for fuel consumption and emissions. We find higher fuel prices yield substantial shifts from less to more fuel-efficient modes, particularly rail. We extend our model to analyze recently enacted fuel economy standards. Fuel economy standards can increase emissions and fuel consumption by shifting shipments to less fuel-efficient modes. Our results suggest mode-shifting makes up a large share of the total rebound effect in heavy-duty vehicles.

This paper examines the implications of alternative forms of cap-and-trade regulations on the California electricity market. Specific focus is given to the implementation of a downstream form of regulation known as the first-deliverer policy. Under this policy, importers (i.e., first-deliverers) of electricity into California are responsible for the emissions associated with the power plants from which the power originated, even if those plants are physically located outside of California. We find that, absent strict non-economic barriers to changing import patterns, such policies are extremely vulnerable to reshuffling of import resources. The net impact implies that the first-deliverer policies will be only marginally more effective than a conventional source-based regulation.

In liberalized electricity markets, the coordination and funding of transmission infrastructure are ongoing challenges. The challenge is to establish transmission tariffs that provide signals for efficient usage of the existing network and demand for new network capacity. Mexico's liberalized electricity market exemplifies the changing responsibilities in transmission planning. Through the adoption of locational marginal pricing, the Mexican market is well positioned to capture congestion costs and motivate efficient behavior. We highlight some of the potential problems that Mexico's currently planned approach and transmission tariffs could raise for generation location incentives. A long-term transmission plan can facilitate network optimization, with generation following the lead of transmission investment instead of the other way around.

A U.S. nation-wide transmission overlay is a high capacity, multi-regional transmission grid, potentially spanning all three interconnections, designed as a single integrated system to provide economic and environmental benefits to the nation. The objective of this paper is to identify benefits to building a national transmission overlay and to lay out essential elements to facilitate continued dialog on this topic. A preliminary study performed on a national scale using a long term investment planning software illustrated that a national transmission overlay, under a high renewable penetration scenario, could result in cost-reduction of between one quarter trillion and one-half trillion dollars over a 40-year period, while promising to increase infrastructure resilience and flexibility.

This paper analyzes the eects of the New Source Review (NSR) environmental regulations on coal-red 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 with a grandfathering clause. Existing plants lost their grandfathering status if they made \major modications" to their plants. We examine whether this caused rms to invest less in their old plants, possibly leading to lower eciency and higher emissions. We nd some evidence that the risk of NSR enforcement reduced capital expenditures at plants. However, we nd no discernable eect

The traditional approach to demand response of paying for a customer’s electricity consumption reductions relative to an administratively set baseline is currently being advocated by the Federal Energy Regulatory Commission (FERC) as a way to foster the participation of final consumers in formal wholesale markets. Although these efforts may lead to greater participation of final consumers in traditional demand response programs, they are likely to work against the ultimate goal of increasing the benefits that electricity consumers realize from formal wholesale electricity markets, because traditional demand response programs are likely to provide a less reliable product than generation resources. The moral hazard and adverse selection problems that reduce the reliability of the product provided by traditional demand response resources can be addressed by treating consumers and producers of electricity symmetrically in the wholesale market. Several suggestions are made for how this would be accomplished in both the energy and ancillary services markets. A specific application of this general approach to the California wholesale electricity market is also provided.

The Clean Power Plan (CPP) is the centerpiece of the US efforts to reduce carbon emissions, introducing regulation of greenhouse gas emissions from existing power plants for the first time on a national basis. These regulations may interact with existing initiatives, for example, in California, where the state has a comprehensive economy-wide cap with emissions allowance trading in place. In addition, three Pacific coast states and British Columbia have supported the idea of comprehensive pricing. This paper provides a summary of a workshop that examined the interaction of these policy approaches. A main observation in the workshop was that the forthcoming CPP will likely facilitate and complicate the prospect of comprehensive carbon pricing. Multistate coordination in complying with the CPP could be key to making simultaneous progress on both the national and regional policy efforts and could provide a pathway from regulation to carbon pricing.

In some cases, transmission rights owners can profit by reducing transmission capacity made available to the competitive market during hours in which there would otherwise be no congestion. Under the California congestion management process, this can be accomplished through the submission of extreme price bids.

The California electricity industry is scheduled to undergo a transition into a less-regulated, competitive market starting on January 1, 1998. This article provides an overview of the organization of this market and its general approach for managing transmission access and pricing. Much of this approach has been developed through a process of negotiation and compromise. The exact implementation of this approach may therefore end up producing an electricity marketplace that is quite different than the one envisioned by those privy to the negotiation process.

One of the most disputed issues of the electricity industry restructuring process has been the organization of the transmission sector of this industry. It has been widely held that this sector must remain tightly regulated due to the external costs and benefits that arise from the operation and construction of transmission resources. In this paper we discuss the traditional approaches to managing these network externalities and examine the potential for a system of tradeable transmission rights, such as transmission congestion contracts, to successfully manage these externalities in a lightly regulated environment.

The complex externalities associated with grid modification have convinced many that a regulated body must plan grid modifications. But an appropriate rule for allocating “transmission congestion contracts” to those who provide grid improvements might allow a decentralized, profit-driven “market” to carry out this difficult function efficiently.

As the electricity industry in California undergoes a process of fundamental restructuring, important new products and markets will be created while others will lose significance. In this paper, we undertake an initial survey of the products and markets that will be prominent in the emerging new electricity industry. We describe approaches to analyzing the prospects for, and the impacts of, market power abuse in these various product markets. The key product markets that are discussed include those for spot electrical energy, for pool-based and physical power contracts, and for reliability services such as load balancing and spinning reserve. Structural measures of market power, such as the Hirschman-Herfindahl Index (HHI), have certain general shortcomings that are exacerbated when applied to restructured electricity markets. Fortunately, the direct estimation of competitive equilibria, such as a Cournot oligopoly equilibrium, appears to be more feasible for this industry than is generally the case.

The California Public Utilities Commission`s proposal to restructure the electricity industry in that state has implications that must be explicitly identified and addressed. Here is a short list of issues that should be confronted forthrightly as the process goes forward. This article is intended as a general guide to the policy issues raised by the California Public Utilities Commission`s Order Instituting Rulemaking on the Commission`s Restructuring California`s Electric Service Industry and Reforming Regulation (referred to as the `Blue Book`). The Blue Book proposes opening portions of the California electric power industry to further competition and introducing performance-based regulation for the remaining elements of the industry. The electric power market would be divided into two sectors: the direct sector, in which customers buy from their supplier of choice, and the utility service sector in which customers buy from the utility. The purpose of this article is twofold: (1) to clarify the choices to be made in pursuing these changes, and the effects of those choices on criteria by which the results of such a restructuring could be evaluated; and (2) to identify issues that present the largest technical challenges to carrying out the Commission`s proposal.

Tradable permit regulations have recently been implemented for climate change policy in many countries. One of the first mandatory markets was the EU Emission Trading Scheme, whose first phase ran from 2005-07. Unlike taxes, permits expose firms to volatility in regulatory costs, but are typically accompanied by property rights in the form of grandfathered permits. In this paper, we examine the effect of this type of environmental regulation on profits. In particular, changes in permit prices affect: (1) the direct and indirect input costs, (2) output revenue, and (3) the carbon permit asset value. Depending on abatement costs, output price sensitivity, and permit allocation, these effects may vary considerably across industries and firms. We run an event study of the carbon price crash on April 25, 2006 by examining the daily stock returns for 90 stocks from carbon intensive industries and approximately 600 stocks in the broad EUROSTOXX index. In general, firms in industries that tended to be either carbon intensive, or electricity intensive, but not involved in international trade, were hurt by the decline in permit prices. In industries that were known to be net short of permits, the cleanest firms saw the largest declines in share value. In industries known to be long in permits, firms granted the largest allocations were most harmed.

Author(s): Bushnell, James; Wolak, Frank A. | Abstract: Regulators of electricity markets around the world continue to struggle with the problem of incentivizing generators whose output, due to their location in the grid, has no viable substitutes. Such generators possess 'local' market power. Since these generators also compete in broader regional markets, the actions taken to exploit their local market power can also effect market outcomes over larger areas. In California, a contract structure known as the reliability must-run (RMR) contract was developed to address the problem of local market power. However, the contract form that was in place during 1998 created serious incentive problems. We find that, during the months of June through September 1998, RMR contracts had the effect of raising overall supply bid prices from most producers, thereby leading to higher energy prices in the California regional market.