Title

“No Shut-off” Policies and Natural Gas Consumption

Document Type

Article

Language

English

Publication Date

5-2017

Publisher

Elsevier

Source Publication

Resource and Energy Economics

Source ISSN

0928-7655

Abstract

Many U.S. states have regulations that prevent natural gas utility companies from turning off service to non-paying consumers. The goal of these policies, termed “no shut-off” (NSO) regulations, is to provide a guaranteed minimum level of residential comfort by reducing the marginal cost of consumption to zero for a period of time. This paper employs a difference-in-difference approach applied to residential U.S. Energy Information Administration data to evaluate whether NSO policies generate higher levels of gas usage. Our preferred specifications suggest that activation of a NSO policy increases natural gas consumption by between 4.7–4.8%, resulting in a total increase of between 66 and 67 billion cubic feet of natural gas consumed per winter season in covered states, at a value of as much as $950–970 million annually.

Comments

Resource and Energy Economics, Vol 48 (May 2017): 19-29. DOI.