nep-reg New Economics Papers
on Regulation
Issue of 2015‒08‒07
seven papers chosen by
Natalia Fabra
Universidad Carlos III de Madrid

  1. Economic Efficiency of Utility Plants Under Renewable Energy Policy By Lynes, Melissa; Featherstone, Allen
  2. Price Interaction in State Level Renewable Energy Credit Trading Programs By Binder, Kyle E.; Mjelde, James W.; Woodward, Richard T.
  3. Cost-effectiveness of policies supporting solar panels in Indiana By Sesmero, Juan P.; Jung, Jinho; Tyner, Wallace E.
  4. Railroad Concentration, Market Shares, and Rates By Prater, Marvin; Sparger, Adam; O'Neil, Daniel Jr.
  5. Nonlinear Pricing By Armstrong, Mark
  6. Market Design for New Leaders By Menezes, Flavio
  7. Measuring the Accuracy of Engineering Models in Predicting Energy Savings from Home Retrofits: Evidence from Monthly Billing Data By Maher, Joe

  1. By: Lynes, Melissa; Featherstone, Allen
    Abstract: Over the last two decades a large number of energy policy changes have occurred specifically with regards to renewable energy. This paper considers how these changes in renewable energy policy affect the production efficiencies of power plants that use renewable and/or nonrenewable energy inputs for electricity production. Using nationwide plant level data from 2003 – 2012 pure technical efficiency is estimated. This study considers the efficiencies of both renewable and nonrenewable energy sources. In addition, this study considers how state level renewable energy policies affect the efficiencies of power plants. In general, this study finds that renewable energy policies do not reduce the efficiencies of electricity generation from a technical aspect.
    Keywords: DEA, Electricity Generation, Renewable Energy Policy, Environmental Economics and Policy, Production Economics, D20, L94, Q40, Q48,
    Date: 2015–05
  2. By: Binder, Kyle E.; Mjelde, James W.; Woodward, Richard T.
    Abstract: Using a Vector Error Correction Model approach, relationships between REC, SREC, electricity, and natural gas prices in Massachusetts and Connecticut are estimated. Confirming previous studies, the results show that REC prices respond negatively to a shock in electricity prices. Additionally, SREC prices are determined mostly by forces outside of the estimated system. Preliminary evidence is found that REC markets across states are related, but that the markets are fragmented, possibly with high transaction costs. Further analysis is required to clarify some of the results which are currently difficult to understand.
    Keywords: Environmental Economics and Policy,
    Date: 2015
  3. By: Sesmero, Juan P.; Jung, Jinho; Tyner, Wallace E.
    Abstract: We adopt a real options approach to quantify transfers to households that are sufficient to induce adoption of solar panels. These transfers are then combined with the panels’ production capacity to obtain a measure of cost-effectiveness of alternative policies that are either in effect, or currently being considered by State governments. Alternative policies are then ranked based on their cost-effectiveness. Generally we find that a combination of net metering and peak-pricing is more cost-effective than the federal tax credit and the solar loan interest tax deduction.
    Keywords: solar energy, real options, net metering, peak pricing, cost-effectiveness, Resource /Energy Economics and Policy, Risk and Uncertainty,
    Date: 2015
  4. By: Prater, Marvin; Sparger, Adam; O'Neil, Daniel Jr.
    Abstract: Since the passage of the Staggers Act in 1980, many railroads have merged. The market share of Class I railroads has increased since then, while the number of Class I railroads has fallen to only seven. Through railroad mergers, rail-to-rail competition has been reduced, railroad market power has increased, and rail costs have fallen by over half in real terms. Over much of this period, most of these reduced costs were passed on to shippers as savings through lower rates. Since 2004, however, average rail rates per ton-mile for all commodities have climbed 36 percent, negating some of the savings over the period. Although some of these real rail rate increases have contributed to record rail profitability and capital investment, most of the rate increases are the result of increased railroad costs; real rail costs, adjusted for productivity, increased 29 percent during the same period. Although deregulation of railroads in 1980 produced more than 550 regional and local railroads throughout America, the 7 Class I railroads originated well over half the grain and oilseed shipments in 2011.
    Keywords: railroad, train, market share, deregulation, grain, rates, Agribusiness,
    Date: 2014–02
  5. By: Armstrong, Mark
    Abstract: I survey the use of nonlinear pricing as a method of price discrimination, both with monopoly and oligopoly supply. Topics covered include an analysis of when it is profitable to offer quantity discounts and bundle discounts, connections between second- and third-degree price discrimination, the use of market demand functions to calculate nonlinear tariffs, the impact of consumers with bounded rationality, bundling arrangements between separate sellers, and the choice of prices for upgrades and add-on products.
    Keywords: Nonlinear pricing; price discrimination; bundling; multidimensional screening; oligopoly
    JEL: D21 D42 L13 L15 M31
    Date: 2015–07
  6. By: Menezes, Flavio
    Abstract: In this article we explore some of the theoretical developments over the last 40 years which led to the emergence of the field of market design. This new field has had a substantive impact on policy, especially after the highly successful auctions of the mobile telephony licences in the mid-1990s in the US. The auctions replaced an inefficient allocation system where licences were allocated to applicants via a lottery and subsequently sold for large windfalls. These auctions raised substantial amount of revenue for the US government and were adopted worldwide, including in Australia. First, I provide a brief history of market design in cases where monetary payments can be used as the basis to allocate goods and services. This history starts with the game theoretical foundations of non-cooperative behaviour – as typically the interests of different individuals are in conflict, for example, when buying or selling goods and services – and then moves on to mechanism design and auction theory and practice. Second, I will review a very large experiment in Brazil where markets were created to avoid electricity rationing in 2001. The choice of this example is not inconsequential. It is meant to illustrate that such an approach to public policy can be successful even in developing countries with weaker institutions. I will then provide some concluding comments.
    Keywords: Auction theory, game theory, market design, Public Economics, D47, C7, D44,
    Date: 2013–09
  7. By: Maher, Joe
    Abstract: To date, the energy savings from energy-efficiency building retrofits are assessed using ex-ante engineering models. In this paper, new evidence from project-level engineering models reveal a new optimism about the reliability of engineering predictions – findings that counter economists’ concerns about engineering bias. At the same time, results demonstrate the need for empirical evaluations to reform DSM policies. For example, policy makers might increase energy savings by targeting large houses with high energy saving potential, or prioritize retrofit technologies that reduce demand during peak-load seasons – insights that are not available from engineering models. This paper provides the first evaluation of engineering models that uses residential billing data, combined with data on observable characteristics of each residence, to assess the accuracy of project-level engineering predictions.
    Keywords: energy efficiency, demand side management, electricity billing data, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q4,
    Date: 2015

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