Some Implications of Policies to Slow the Growth of Electricity Demand in California

by Kent P. Anderson

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Demand projections for California indicate that the electric utility system may grow seven times its 1970 size by the year 2000. This report identifies conditions under which policies for slowing the growth of electricity demand might be desirable and discusses likely economic costs. The report includes (1) a general description, in qualitative terms, of the major economic effects of a policy-induced slowing of electricity demand growth in any given state or region, and (2) an examination of the quantitative evidence for California regarding the two potentially most worrisome side-effects of growth-slowing policies: investment relocation and the acceleration of fossil fuel demand growth. In addition, the efficiency of electricity pricing is analyzed in a case study of a Southern California utility. (See also R-1084, R-1115, R-1116.)

This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.