Presentation is loading. Please wait.

Presentation is loading. Please wait.

Dlprmb14Oct08 Economic & Demographic Consequences of Eliminating Price Caps on Electricity Rates in Pennsylvania Rose M. Baker David L. Passmore.

Similar presentations


Presentation on theme: "Dlprmb14Oct08 Economic & Demographic Consequences of Eliminating Price Caps on Electricity Rates in Pennsylvania Rose M. Baker David L. Passmore."— Presentation transcript:

1 dlprmb14Oct08 Economic & Demographic Consequences of Eliminating Price Caps on Electricity Rates in Pennsylvania Rose M. Baker David L. Passmore

2 dlprmb14Oct08 Penn State Workforce Education & Development Initiative Rose Baker David Passmore Director Center for Regional Economic & Workforce Analysis Director Center for Regional Economic & Workforce Analysis Professor & Director Penn State Institute for Research in Training & Development Professor & Director Penn State Institute for Research in Training & Development

3 dlprmb14Oct08 Regulation, Deregulation, Caps… Natural monopoly –Generation –Transmission –Distribution RegulationDeregulation Rate Caps

4 dlprmb14Oct08 Methods… Baseline forecast of the Pennsylvania economy through 2015Baseline forecast of the Pennsylvania economy through 2015 Rate removal forecast conducted by simulating 10% increase in electricity rates through 2015Rate removal forecast conducted by simulating 10% increase in electricity rates through 2015 Benchmark of effects of rate removal =Benchmark of effects of rate removal = –Rate removal forecast minus –Baseline forecast

5 dlprmb14Oct08 Scenarios through 2015 for residential, commercial, & industrial PQxSales= 10% Over 2006 price Three megawatt forecasts: Linear growth Linear growth Linear +10% Linear +10% Linear – 10% Linear – 10% Three sales forecasts for price – quantity pairs

6 dlprmb14Oct08 REMI policy variables… Electricity Fuel Costs— IndustrialElectricity Fuel Costs— Industrial Electricity Fuel Costs— CommercialElectricity Fuel Costs— Commercial Consumer price (equivalent amount) — Household operationConsumer price (equivalent amount) — Household operation

7 dlprmb14Oct08 Jobs—4,183 to 8,000 loss initially; 6,000 to 11,700 by 2015

8 dlprmb14Oct08 Gross state product—$365 million to $672 million loss initially; $718 million to $1.3 billion by 2015

9 dlprmb14Oct08 Real disposable income—$636 million to $1.3 billion loss initially; $720 million to $1.5 billion by 2015

10 dlprmb14Oct08 Population—3,624 to 4,851 loss initially; 9,824 to 19,028 by 2015

11 dlprmb14Oct08 Implications  ? Depends on your perspective… Impact on economy and demography depends on perspectiveImpact on economy and demography depends on perspective Impact on individual households could be substantialImpact on individual households could be substantial

12 dlprmb14Oct08 Impact on economy & demography… Substantial, in terms of absolute numbersSubstantial, in terms of absolute numbers Small, as a % of total economy and demographySmall, as a % of total economy and demography For every 10% price increase

13 dlprmb14Oct08 Impact on individual households… Small, but real, risk of job and income lossSmall, but real, risk of job and income loss Risks and changes affect low income household more than high income householdsRisks and changes affect low income household more than high income households

14 dlprmb14Oct08 Two changes in lifestyle likely… Conservation — Reduce electricity expenditures as part of household operationsConservation — Reduce electricity expenditures as part of household operations Substitution — Shift expenditures to pay for higher electricity costsSubstitution — Shift expenditures to pay for higher electricity costs

15 dlprmb14Oct08 What will the rate cap removal mean for households & businesses? Your thoughts?

16 dlprmb14Oct08 Economic & Demographic Consequences of Eliminating Price Caps on Electricity Rates in Pennsylvania Rose M. Baker David L. Passmore


Download ppt "Dlprmb14Oct08 Economic & Demographic Consequences of Eliminating Price Caps on Electricity Rates in Pennsylvania Rose M. Baker David L. Passmore."

Similar presentations


Ads by Google