CEP 17-07 Utilities Included: Split Incentives in Commercial Electricity Contracts
نویسندگان
چکیده
The largest decile of commercial electricity customers comprises half of commercial sector electricity usage. We quantify a substantial split incentives problem that exists when these large rms are on electricity-included property lease contracts. Using exogenous variation in weather shocks, we show that customers on tenant-paid contracts use 6-14% less electricity in summer months. The policy implications are promising. Nationwide energy savings from aligning incentives for the largest 10% of commercial customers exceeds analogous savings from the entire residential electricity sector. It is also coste ective: switching to tenant-paid contracts via sub-metering has a private payo period of under one year. JEL: D22, L14, Q51
منابع مشابه
Utilities Included: Split Incentives in Commercial Electricity Contracts
The largest decile of commercial electricity customers comprises half of commercial sector electricity usage. We quantify a considerable split incentives problem that exists when these large firms are on electricity-included property lease contracts. Controlling for a rich set of variables that may correlate with selection into contract type, we use exogenous variation in weather shocks to show...
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