Abstract
This paper investigates the relationship between the regulatory policy revenue decoupling, which separates utilities’ revenue from sales fluctuations, and electricity customers’ energy demand and efficiency in the U.S. electricity sector. To this end, we use recent Stochastic Frontier Analysis estimation techniques that account for both persistent and transient energy efficiency. The results show a significant negative correlation between decoupling and electricity consumption. However, the implementation year, which serves as a reference for price adjustments, is associated with increasing electricity demand and decreasing transient energy efficiency. Therefore, utilities seem to anticipate the implementation of decoupling, which partially offsets the benefits.
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