Revenue decoupling, energy demand, and energy efficiency: Empirical evidence from the U.S. electricity sector

Victor von Loessl and Heike Wetzel

Utilities Policy, 2022, vol. 79, issue C

Abstract: This paper investigates the relationship between the regulatory policy revenue decoupling, which separates utilities’ revenue from sales fluctuations, and electricity customers’ energy demand and efficiency in the U.S. electricity sector. To this end, we use recent Stochastic Frontier Analysis estimation techniques that account for both persistent and transient energy efficiency. The results show a significant negative correlation between decoupling and electricity consumption. However, the implementation year, which serves as a reference for price adjustments, is associated with increasing electricity demand and decreasing transient energy efficiency. Therefore, utilities seem to anticipate the implementation of decoupling, which partially offsets the benefits.

Keywords: Revenue decoupling; Energy demand; Energy efficiency (search for similar items in EconPapers)
JEL-codes: C23 L51 L94 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:79:y:2022:i:c:s0957178722000807

DOI: 10.1016/j.jup.2022.101416

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