Irrigation and the demand for electricity. Progress report

Abstract

In order to anticipate the need for generating capacity, utility planners must estimate the future growth in electricity demand. The need for demand forecasts is no less important for the nation's Rural Electric Cooperatives (RECs) than it is for the investor-owned utilities. The RECs serve an historically agrarian region; therefore, the irrigation sector accounts for a significant portion of the western RECs' total demand. A model is developed of the RECs' demand for electricity used in irrigation. The model is a simultaneous equation system which focuses on both the short-run utilization of electricity in irrigation and the long-run determination of the number of irrigators using electricity. Irrigation demand is described by a set of equations in which the quantity of electricity demanded, the average electricity price, the number of irrigation customers, and the ratio of electricity to total energy used for irrigation are endogenous. The structural equations are estimated using pooled state-level data for the period 1961-1977. In light of the model's results, the impact of changes in relative energy prices on irrigation can be examined.