Power to the People: Does Ownership Type Influence Electricity Service?
Richard T. Boylan
Journal of Law and Economics, 2016, vol. 59, issue 2, 441 - 476
Abstract:
After storm-related power outages, many have recommended municipalizing investor-owned utilities, claiming that profit-making utilities have insufficient incentive to prepare for storms. I provide empirical evidence that municipal utilities spend more on maintenance of their distribution network than investor-owned utilities. Nonetheless, I find that storms significantly disrupt electricity consumption in areas served by municipal utilities but do not disrupt areas served by investor-owned utilities. These results are based on a stratified random sample of 241 investor-owned, 96 cooperative, and 94 municipal utilities in the United States between 1999 and 2012. I conclude that municipal utilities' in-efficiencies are more important in causing power outages than investor-owned utilities' disincentives to spend on maintenance.
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/687755
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