TY - JOUR
T1 - Restructuring and the retail residential market for power in Pennsylvania
AU - Kleit, Andrew N.
AU - Shcherbakova, Anastasia V.
AU - Chen, Xu
N1 - Funding Information:
This research is sponsored by the Penn State Electricity Markets Initiative . The Initiative is sponsored by Constellation Energy, Direct Energy, Exelon Corporation, FirstEnergy Solutions, GenOn Energy, and PPL EnergyPlus. The views expressed herein are solely those of the authors and not necessarily those of the EMI sponsors.
Copyright:
Copyright 2012 Elsevier B.V., All rights reserved.
PY - 2012/7
Y1 - 2012/7
N2 - In January 2010 electricity retail residential rate caps expired in a large part of Pennsylvania, allowing consumers to shop for electricity in the retail market. In this paper we employ customer-level data from the relevant territory to analyze what residential customer and community characteristics impacted the decision of whether or not to switch to an alternative electricity provider, and when to make the switch. Results show that customers with higher usage levels (especially around the time of the program's introduction), electric heating, and those living in more urban and more educated communities with lower unemployment rates and higher median household incomes were both more likely to switch, and more likely to do so faster. Lower switching rates and a slower switching response was observed from customers with more variable month to month usage (perhaps this made them unsure of future benefits from switching), those on alternative residential electricity rates (time-of-day and thermal storage programs), and those new to the relevant area (perhaps due to lack of information about the residential choice program).Critics of retail electricity competition have suggested that it disadvantages poor and elderly ratepayers. Our results do not support this contention. Customers living in communities with higher poverty rates were actually more likely to switch (and do so faster) than middle-income consumers. Communities with higher shares of senior population were not found to have lower switching rates from younger communities.
AB - In January 2010 electricity retail residential rate caps expired in a large part of Pennsylvania, allowing consumers to shop for electricity in the retail market. In this paper we employ customer-level data from the relevant territory to analyze what residential customer and community characteristics impacted the decision of whether or not to switch to an alternative electricity provider, and when to make the switch. Results show that customers with higher usage levels (especially around the time of the program's introduction), electric heating, and those living in more urban and more educated communities with lower unemployment rates and higher median household incomes were both more likely to switch, and more likely to do so faster. Lower switching rates and a slower switching response was observed from customers with more variable month to month usage (perhaps this made them unsure of future benefits from switching), those on alternative residential electricity rates (time-of-day and thermal storage programs), and those new to the relevant area (perhaps due to lack of information about the residential choice program).Critics of retail electricity competition have suggested that it disadvantages poor and elderly ratepayers. Our results do not support this contention. Customers living in communities with higher poverty rates were actually more likely to switch (and do so faster) than middle-income consumers. Communities with higher shares of senior population were not found to have lower switching rates from younger communities.
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U2 - 10.1016/j.enpol.2012.04.008
DO - 10.1016/j.enpol.2012.04.008
M3 - Article
AN - SCOPUS:84861221963
VL - 46
SP - 443
EP - 451
JO - Energy Policy
JF - Energy Policy
SN - 0301-4215
ER -