Shock Value: Bill Smoothing and Energy Price Pass-Through

Catherine Hausman

No 24558, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Energy prices are volatile, affect every consumer and industry in the economy, and are impacted by regulations including gas taxes and carbon pricing. Like the pass-through literature in general, the growing energy pass-through literature focuses on marginal prices. However, multi-part pricing is common in energy retail pricing. I examine the retail natural gas market, showing that while marginal prices exhibit full or nearly full pass-through, fixed fees exhibit negative pass-through. This is consistent with the stated desire by utilities and regulators to prevent "bill shock." I discuss implications for pass-through estimation and for proposed alternative pricing structures for regulated utilities.

JEL-codes: L11 L95 Q41 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-ene and nep-reg
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Catherine Hausman, 2019. "Shock Value: Bill Smoothing and Energy Price Pass‐Through," The Journal of Industrial Economics, vol 67(2), pages 242-278.

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Journal Article: Shock Value: Bill Smoothing and Energy Price Pass‐Through (2019)
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