Metropolitan Evidence Regarding Small Commercial and Industrial Electricity Consumption

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 through 2017. 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 and an error correction model. 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.

Small Firm Electricity Demand in Las Cruces, New Mexico, USA

“…Bernstein and Griffin (2006), however, report that the price of natural gas is statistically insignificant in the long-run as it is a more expensive alternative to electricity in much of the United States. Allen and Fullerton (2019) corroborate that finding for CIS customers in El Paso in the long-run. Surprisingly, cross-price elasticity estimates in that same study indicate that electricity and natural gas are complementary inputs, rather than substitutes, at least in the short-run.…”

“…In contrast to those outcomes, an inverse relationship existing between own-price and service sector electricity consumption has been reported for Korea (Lim et al, 2014). Most recently, own-price variations are found to exercise insignificant impacts on CIS usage in the short-run in the geographically adjacent El Paso service area (Allen and Fullerton, 2019). Statistically reliable inverse own-price effects are registered in that study for CIS usage over the long-run.…”

“…Watson et al (1987) find an inverse relationship between income and CIS usage in a study of Rhode Island and Massachusetts. Along those lines, Allen and Fullerton (2019) record an inverse relationship between real per capita incomes and CIS usage in El Paso, Texas in the short-run. However, that effort reports an insignificant income impact for the long-run in El Paso.…”

“…A study of residential electricity usage justified the use of average price of electricity over marginal price as customers tend to react to their bill as a whole and not consider marginal increase that may have been factored into it (Wilder and Willenborg, 1975;Ito, 2014). Average price has also historically been used and proven reliable in studies examining electricity consumption in the El Paso and Las Cruces service areas (Fullerton, 1998;Fullerton et al, 2016a;Allen and Fullerton, 2019).…”

Perceptions and Determinants of Smes Consumers’ Behaviors for Electricity Saving: Evidence From Indonesia

“…Similar case for residential sector is discussed in (Park and Lee, 2013;Akil et al, 2018). Prior studies from several countries which analyzed different issues on SMEs have been published, such as in (Wongsapai et al, 2017) for Thailand, (Kemayel, 2015) for Lebanon, (Chen et al, 2017) for China, (Büyükkeklik et al, 2016) for Turkey, (Amar and Davis, 2015) for Indonesia, (Goto and Wilbur, 2019) for Japan, (Allen and Fullerton, 2019) for USA, (Francisco et al, 2018) for Philippine, and in (Sahoo and Yadav, 2018) for India.…”