“No shut-off” policies and natural gas consumption

David E. Clark, Catherine Dybicz, Andrew Hanson and Farrokh Nourzad

Resource and Energy Economics, 2017, vol. 48, issue C, 19-29

Abstract: Many U.S. states have regulations that prevent natural gas utility companies from turning off service to non-paying consumers. The goal of these policies, termed “no shut-off” (NSO) regulations, is to provide a guaranteed minimum level of residential comfort by reducing the marginal cost of consumption to zero for a period of time. This paper employs a difference-in-difference approach applied to residential U.S. Energy Information Administration data to evaluate whether NSO policies generate higher levels of gas usage. Our preferred specifications suggest that activation of a NSO policy increases natural gas consumption by between 4.7–4.8%, resulting in a total increase of between 66 and 67 billion cubic feet of natural gas consumed per winter season in covered states, at a value of as much as $950–970 million annually.

Keywords: Natural gas usage; Utility regulation (search for similar items in EconPapers)
JEL-codes: K23 L51 Q48 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:48:y:2017:i:c:p:19-29

DOI: 10.1016/j.reseneeco.2017.01.002

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