UC Davis

My dissertation leverages electricity data for an economic investigation of three disparate topics: the effects of the COVID-19 pandemic; the implications of government ownership on the exercise of market power in the Australian National Electricity Market (NEM); and, the unintended consequences of US Clean Air Act regulation on coal boilers.

First, we use high-frequency data on electricity consumption to demonstrate the effect of COVID restrictions on business activity and the mitigating effects of federal support programs---including, Economic Injury Disaster Loans and the Paycheck Protection Program. We find that COVID-mandated business closures led to a 48 to 71 kwh reduction in daily consumption, corresponding to 13\% to 20\% drop compared to pre-pandemic use. While all firms reduced electricity consumption on average, these reductions are significantly less pronounced for firms that received a federal loan or grant.

Next, we study the intertwined effects of government ownership and market power in the context of the Australian NEM. In particular, we focus on the 2017 direction to place downward pressure on wholesale prices given by the Queensland Government to one of its government-owned generators, Stanwell Corp. We base our analysis on a benchmark model, which estimates counterfactual prices under the assumption of perfect competition. The comparison of actual market outcomes with simulations suggests that the exercise of market power by Queensland generators during high-demand periods decreased after the issuing of the direction. However, we find no evidence of government intervention affecting markups at lower levels of demand.

Finally, we study vintage differentiation in the context of New Source Review---a set of regulations passed within the US Clean Air Act imposing costly sulfur dioxide abatement requirements on new units but not existing ones. We analyze how this differential treatment affected the utilization and retirement of coal boilers. We find that the regulatory differentiation within NSR had a strong effect on both of the internal and external operational margins. Exempted coal boilers were associated with a 1.5 percentage point increase in probability of surviving an additional year and an increase of around 700 hours to their annual operations.