Regulatory Rationing of Electricity Under a Supply Curtailment.

by Jan Paul Acton, Ragnhild Sohlberg Mowill

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During the winter of 1973-74, Los Angeles adopted an emergency curtailment ordinance requiring percentage reductions in all uses of electricity to deal with an acute shortage of generating fuels. Since nonstandard regulatory responses are increasingly being considered by legislatures and regulatory bodies around the country, an analysis of this experience should be useful in the evaluation of alternative policies. Three approaches are taken in examining the customer response to the ordinance, including comparison of actual utilization with predicted levels using a regression model which controls for price, weather, economic activity, and minutes of daylight. No matter which analytic approach is taken, the conclusion is that the response to the ordinance was rapid and substantial. The effect on the pattern of consumption appears to be lasting, and it is unlikely that a price change alone would have achieved such a significant reduction in the short run.

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