Impact of the U.S. electric deregulation on california renewable investments

Peter Y. Jang, Mario G. Beruvides

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

U.S. electricity industry went through federal deregulation and restructuring process in early 1990s. The two major objectives of deregulations were to lower electric prices to end-consumers by retail competition and to encourage renewable energy investments to reduce imported fossil fuels and promote cleaner environment. The federal deregulations mandated the disassembly of the incumbent utility monopoly, or the vertical integration of investor owned utilities (IOUs), into individual segments of electricity generation, transmission/distribution, and retail services. Renewable investments were also strongly supported by the federal tax incentives of production tax credit (PTC) and investment tax credit (ITC). With all these federal initiatives, the implementation of retail competition and renewable energy policies were driven by state governments who took into account their own political and economic factors in their policy decision processes. As of 2018, 18 states in the U.S. have deregulated their electric markets, and California has been a front runner in terms of adopting electric deregulation policies. An example is an electric restructuring legislature and a renewable portfolio standard (RPS) established in 1996 and 2002, respectively. This paper aims to analyze the impact of the U.S. and State electric deregulation on the level of renewable energy investments in California, from 1990 to 2018. The analysis methodology is a multivariate regression of annual renewable additions on the state electric prices, and federal and state initiatives, with ordinary least squares approach. The results show some very distinct factors in the deregulation of electric industry in California.

Original languageEnglish
Title of host publicationProceedings of the 2020 IISE Annual Conference
EditorsL. Cromarty, R. Shirwaiker, P. Wang
PublisherInstitute of Industrial and Systems Engineers, IISE
Pages109-114
Number of pages6
ISBN (Electronic)9781713827818
StatePublished - 2020
Event2020 Institute of Industrial and Systems Engineers Annual Conference and Expo, IISE 2020 - Virtual, Online, United States
Duration: Nov 1 2020Nov 3 2020

Publication series

NameProceedings of the 2020 IISE Annual Conference

Conference

Conference2020 Institute of Industrial and Systems Engineers Annual Conference and Expo, IISE 2020
CountryUnited States
CityVirtual, Online
Period11/1/2011/3/20

Keywords

  • California electricity
  • Deregulation
  • Energy investment
  • Renewable energy
  • U.S. electric market

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