131 research outputs found

    Enforcement of Vintage Differentiated Regulations: The Case of New Source Review

    Get PDF
    �This paper analyzes the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. �Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants with a grandfathering clause. �Existing plants lost their grandfathering status if they made ``major modifications'' to their plants. �We examine whether this caused firms to invest less in their old plants, possibly leading to lower efficiency and higher emissions. We find some evidence that the risk of NSR enforcement reduced capital expenditures at plants. However, we find no discernable effect on the operating costs, fuel efficiency or emissions of these plants.�New Source Review; Environmental Regulations; productivity; and Electricity

    Enforcement of Vintage Differentiated Regulations: The Case of New Source Review

    Get PDF
    �This paper analyzes the effects of the New Source Review (NSR) environmentalregulations on coal-fired electric power plants. �Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. �Existing plants lost their exemptions if they made ``major modifications.'' �We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find �evidence that heightened NSR enforcement reduced capital expenditures at vulnerableplants. However, we find no discernable effect on other inputs or emissions.This paper analyzes the effects of the New Source Review (NSR) environmental�regulations on coal-fired electric power plants. �Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. �Existing plants lost their exemptions if they made ``major modifications.'' �We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find �evidence that heightened NSR enforcement reduced capital expenditures at vulnerable�plants. However, we find no discernable effect on other inputs or emissions.�New Source Review; Environmental Regulations; productivity; electricity

    The Guy at the Controls: Labor Quality and Power Plant Efficiency

    Get PDF
    This paper examines the impact of individual human operators on the fuel efficiency of power plants. Although electricity generation is a fuel and capital intensive enterprise, anecdotal evidence, interviews, and empirical analysis support the hypothesis that labor, particularly power plant operators, can have a non-trivial impact on the operating efficiency of the plant. We present evidence to demonstrate these effects and survey the policies and practices of electricity producing firms that either reduce or exacerbate fuel efficiency differences across individual plant operators.

    Local Solutions to Global Problems: Policy Choice and Regulatory Jurisdiction

    Get PDF
    This paper considers the efficiency of various types of environmental regulations when they are applied locally to pollutants whose damages extend outside the jurisdiction of the local regulator. We draw on examples from state- and city-level efforts to address climate change by enacting policies to reduce greenhouse gases. While previous work has noted the possibility for leakage, whereby the polluting sources move outside the jurisdiction of the regulation in order to escape it, we note an additional problem when policies are targeted downstream at consumers of goods whose production creates pollution. Specifically, we show how consumer-based policies can be circumvented by a simple reshuffling of who is buying from whom. We argue that the leakage and reshuffling problems are most pronounced with more flexible or market-based regulations. We conclude that localities may have the most effect on global pollutants when they enact efficiency standards or targeted subsidies.

    Inefficiencies and Market Power in Financial Arbitrage: A Study of California’s Electricity Markets

    Get PDF
    As with other commodities, electricity is often traded on both forward and spot markets. This was initially true in the restructured California electricity industry from 1998 to 2000. Though the power traded in the forward and spot markets was for delivery at the same times and locations, prices often differed in significant and predictable ways. We consider several explanations for this apparent inefficiency, concluding that uncertainty about regulatory penalties for trading in the spot market caused most firms to avoid trading on inter-market price differences. The few firms that did carry out these trades did not find it profit-maximizing to eliminate the price differences. Skyrocketing prices in the summer of 2000, however, changed the major buyers’ (utilities’) incentives and increased the price differentials between the markets.market

    Trading Inefficiencies in California's Electricity Markets

    Get PDF
    We study price convergence between the two major markets for wholesale electricity in California from their deregulation in April 1998 through November 2000, nearly the end of trading in one market. We would expect profit-maximizing traders to have eliminated persistent price differences between the markets. Institutional impediments and traders' incomplete understanding of the markets, however, could have delayed or prevented price convergence. We find that the two benchmark electricity prices in California -- the Power Exchange's day-ahead price and the Independent System Operator's real-time price -- differed substantially after the markets opened but then appeared to be converging by the beginning of 2000. Starting in May 2000, however, price levels and price differences increased dramatically. We consider several explanations for the significant price differences and conclude that rapidly changing market rules and market fundamentals, including one buyer's attempt to exercise a form of monopsony power, made it difficult for traders to take advantage of opportunities that ex post appear to have been profitable.

    Enforcement of vintage differentiated regulations: the case of New Source Review

    Get PDF
    This paper analyzes the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Existing plants lost their exemptions if they made major modifications. We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital expenditures at vulnerable plants. However, we find no discernable effect on other inputs or emissions. This paper analyzes the effects of the New Source Review (NSR) environmental regulations on coal-fired electric power plants. Regulations that grew out of the Clean Air Act of 1970 required new electric generating plants to install costly pollution control equipment but exempted existing plants. Existing plants lost their exemptions if they made major modifications. We examine whether this caused firms to invest less in grandfathered plants, possibly leading to lower efficiency and higher emissions. We find evidence that heightened NSR enforcement reduced capital expenditures at vulnerable plants. However, we find no discernable effect on other inputs or emissions
    corecore