Power to the People: Does Ownership Type Influence Electricity Service? | Zendy

Richard T. Boylan | Zendy

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Power to the People: Does Ownership Type Influence Electricity Service?

Author(s) -

Richard T. Boylan

Publication year - 2016

Publication title -

the journal of law and economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.42

H-Index - 81

eISSN - 1537-5285

pISSN - 0022-2186

DOI - 10.1086/687755

Subject(s) - incentive , electricity , business , storm , electric power distribution , finance , profit (economics) , power (physics) , economics , microeconomics , engineering , physics , quantum mechanics , geology , electrical engineering , oceanography

After storm-related power outages, many have recommended municipalizing investor-owned utilities, claiming that profit-making utilities have insufficient incentive to prepare for storms. I provide empirical evidence that municipal utilities spend more on maintenance of their distribution network than investor-owned utilities. Nonetheless, I find that storms significantly disrupt electricity consumption in areas served by municipal utilities but do not disrupt areas served by investor-owned utilities. These results are based on a stratified random sample of 241 investor-owned, 96 cooperative, and 94 municipal utilities in the United States between 1999 and 2012. I conclude that municipal utilities in-efficiencies are more important in causing power outages than investor-owned utilities disincentives to spend on maintenance

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