Conference Agenda

Despite the growing frequency of power outages in the context of climate change, little is known about the underlying causes of grid instability. In this study, we document and quantify previously overlooked factors contributing to unplanned electricity outages: upstream water temperature and water height. Using high-frequency data from utility outage reports and a novel instrumental variable—upstream water flow—we establish that both water temperature and water height significantly affect the likelihood of unplanned outages at the plant unit level. Moreover, we demonstrate that these effects are non-linear. Specifically, the probability of an outage exceeds 50% when upstream water temperature reaches 25°C, while for water height, the outage probability peaks at 50 cm and diminishes as water height increases. These effects are predominantly driven by older power plants, suggesting that the age and resilience of the plant infrastructure play a critical role in its vulnerability to hydrological conditions. Those results may be relevant not only for coal power plants but also nuclear plants.

Disruptions in water supply have become more frequent due to increased demands and drought risk. However, evidence is limited on how within-city reliability shocks interact with increasing-block tariffs (IBTs) and the rising use of decentralized self-supply through private wells in developing countries. We quantify the responses of network demand and private-well adoption to supply-failure exposure under an IBT, controlling for neighborhood and socioeconomic characteristics, and observe how housing type mediates adaptation and impacts equity and utility revenue. We assembled a georeferenced micro-database for a drought-prone city in São Paulo (Brazil), linking 148,000 residential connections with housing typologies, through 2022 census microdata. We adopt a structural equation model to evaluate the substitution effect of using a well on tap water consumption and estimate that private wells displace 84-94\% of metered network consumption. We also evaluate the price response using 2021-2023 monthly billing panels, estimating demand models with census-tract and month-year fixed effects and lagged average prices. Demand is price-inelastic but responsive (elasticity of -0.35) and displays a steep income gradient: elasticities are around -0.6 for low-income groups and become indistinguishable from zero in higher-income settings. The results point to an adverse selection dynamic, as the settings able to coordinate collective well use are also higher-demand customers facing higher prices under the IBT, weakening conservation incentives and cross-subsidies while shifting coping costs toward households with fewer supply alternatives. The findings underscore the need to jointly design reliability investments, tariff structures, and groundwater self-supply management instruments to protect utility cost recovery and equity in water-stressed cities. (FAPESP 2025/11358-0, 2022/15693-0, 2020/15434-0)