Conference Agenda

Using a novel least average cost dispatch (LACD) algorithm, this paper evaluates the economic and environmental costs of Texas maintaining an isolated electricity grid. We build a structural model to characterize the supply of electricity and simulate counterfactual integration scenarios. We find that Texas's largest population zones connected with neighboring states to the East results in reductions of generation costs of \$100M annually. We also show that accounting for fixed costs in the dispatch model allocates generation to units with lower average fixed costs than under least marginal cost dispatch. This change in allocation along the margin results in large differences in emissions impacts. We find that some interconnection scenarios decrease the social cost of emissions by up to \$360M annually, while others result in higher emissions. In a case study for one proposed interconnection, we show that generation and revenues shift to the Texas zone. We also show that reductions in costs of maintaining reliability are about as much as generation cost reductions.

The marginal cost of electricity fluctuates hour-by-hour, yet retail customers typically face flat prices. Using data from all seven US wholesale markets and a new method to evaluate alternative rates set in advance that accounts for equilibrium price effects, we estimate efficiency gains from time-varying price schedules that better align price with cost. We have three main results. First, time-of-use rates and critical-peak pricing, the two most common time-varying rate plans, each correct about 10% of mispricing. Second, more complex rate structures based on historical prices often backfire. Third, an alternative structure, real-time pricing with price caps, can capture most potential efficiency gains.

This study examines the role of information in shaping public acceptability of electricity imports between France and Germany. Using demographically representative surveys conducted in parallel in both countries, we implemented a randomized between-subject experiment with two information treatments: one disclosing the primary energy source of imported electricity and another additionally highlighting the price-reducing effect of imports for consumers in the importing country. Our econometric results indicate that providing information on price-reducing effects significantly increases acceptability of electricity imports in both countries, with heterogeneous impacts across socio-demographic groups. In contrast, evidence that informing respondents about the primary energy source influences acceptability is limited and primarily observed in the French sample. These findings underscore the importance of targeted information strategies for fostering cross-border energy cooperation and suggest that economic considerations may outweigh source-related concerns in public opinion.