Smart Power Limits: Designing Shortage Mechanisms for Extreme Events

Mar Reguant and Mayra Wagner

No 34196, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: As shortages of resources like water and electricity due to extreme weather events become more frequent, high prices alone may fail to curb demand, making shortages more common. We examine a power limit policy for residential electricity households that rations electricity consumption rather than setting it to zero, as in a traditional rolling blackout. We find that power limits can provide equivalent savings to large blackouts, even when generous. Additionally, due to selection, power limits reduce the number of households affected by a shortage event. We conclude by discussing the welfare consequences of power limits and their heterogeneous impact across households.

JEL-codes: D45 L94 (search for similar items in EconPapers)
Date: 2025-09
New Economics Papers: this item is included in nep-ene and nep-env
Note: EEE IO
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34196.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34196

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34196
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().