Do Renewables Portfolio Standards Increase Electricity Prices? A Synthetic Control Approach

Karen Maguire and Abdul Munasib ()
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Abdul Munasib: University of Georgia

No 1403, Economics Working Paper Series from Oklahoma State University, Department of Economics and Legal Studies in Business

Abstract: We examine whether state level Renewable Portfolio Standards (RPS) influence prices in the electricity market. While vital environmental goals underlie the rationale for RPS there exists a potential for negative welfare impacts through increased costs of electricity generation forcing consumers to allocate a larger portion of their income to energy consumption. We employ the Synthetic Control Method (SCM) for comparative case study and focus on Texas, an early adopter of RPS and arguably a success story. We find that RPS increased residential, industrial and total electricity prices while commercial prices were unaffected.

Keywords: Renewable portfolio standard; electricity price; synthetic control method (search for similar items in EconPapers)
JEL-codes: H7 Q4 Q42 Q48 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013-06, Revised 2013-08
New Economics Papers: this item is included in nep-ene, nep-ger and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:okl:wpaper:1403

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