Metropolitan Evidence Regarding Small Commercial and Industrial Electricity Consumption

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Abstract

Small commercial and industrial (CIS) electricity demand is an important category of electric energy consumption. Historically, it has received substantially less research attention than residential usage, potentially due to data constraints. This study seeks to partially fill that gap in the energy economics literature by employing a fairly unique data set for the El Paso, Texas, USA metropolitan economy that includes private capital stock estimates from 1978 through2017. The empirical model is specified using a recently developed analytical framework based on duality theory and a derived input demand function. Parameter estimation is completed using an Autoregressive-Distributed Lag model (ARDL) and an Error Correction Model (ECM). In the long-run, CIS customers in El Paso respond only to own-price and the quantity of capital stock per capita.  In the short-run, CIS customers adjust their electricity usage in response to changes in all variables except for the price of electricity.  The most unexpected result from this analysis is a short-run income elasticity of -0.32, indicating that CIS electricity usage decreases with economic expansion in El Paso, Texas.Keywords: Electricity usage, Metropolitan economic growth, Small commercial and industrial customers, Capital stocks, Duality theory, Derived input demandJEL Classifications: Q41; R11; M21DOI: https://doi.org/10.32479/ijeep.8233

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Author Biographies

Keighton R. Allen, El Paso Electric Company

Keighton Allen is an Economist with El Paso Electric Company.  She holds BBA and MS Economics degrees from the University of Texas at El Paso.  She has previously published research on enregy usage patterns in Theoretical Economics Letters.

Thomas M. Fullerton, University of Texas at El Paso

Tom Fullerton is a Professor of Economics in the College of Business Administration at the University of Texas at El Paso where he also holds the Chair for the Study of Trade in the Americas.  Dr. Fullerton teaches graduate and undergraduate courses in econometrics, managerial economics, urban economics, and border economics.  Fullerton holds degrees from UTEP, Iowa State University, University of Pennsylvania, and University of Florida.

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Published

2019-10-04

How to Cite

Allen, K. R., & Fullerton, T. M. (2019). Metropolitan Evidence Regarding Small Commercial and Industrial Electricity Consumption. International Journal of Energy Economics and Policy, 9(6), 1–11. Retrieved from https://econjournals.com./index.php/ijeep/article/view/8233

Issue

Vol. 9 No. 6 (2019)

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Articles

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