ESSAYS ON COMMUNITY CHOICE AGGREGATION, CORRUPTION, RELIABILITY AND RENEWABLE ENERGY INVESTMENT IN THE U.S. ELECTRIC INDUSTRY

Abstract

This dissertation explores topics in public choice such as direct democracy, representative democracy, and corruption and applies them in the context of energy economics, particularly the electricity sector. The first chapter looks at direct democracy and representative democracy in the context of electricity provision. In some states of the U.S., electricity is provided by a mechanism called Community Choice Aggregation program or CCA. CCAs work in different ways in different states. In Illinois, CCAs adopted a direct democracy approach where communities can vote on which electric provider to choose electricity from; whereas in Massachusetts, CCAs decide the rate via the method of representative democracy where people do not get to vote on the provider of electricity. My study shows that direct democracy approach helps the customers by reducing the rate of electricity. The second chapter looks at corruption and how it can impact the efficiency and reliability of electricity services. The study aims to examine whether states with more incidence of corruption in the U.S. have less efficient and less reliable electricity services, or not. I measure the efficiency of electricity services in terms of blackouts. I do not find any evidence of the impact of corruption on electricity efficiency. However, I found that GDP per capita and population have a significant positive impact on outages. Additionally, I did not find any evidence of corruption impacting reliability of electricity services. I found, however, that states with large population size have less reliable electricity services. The third chapter considers the impact of investment in renewable energy in electricity production on corruption. I found that large investment in renewable energy in the U.S. electricity production has no impact on corruption. However, corruption has a persistent effect, and, thus, states with high corruption tend to have more corruption in the future.