Modeling the residential electricity consumption within a restructured power market

TL;DR

This paper develops a general econometric model to analyze residential electricity consumption in the US power market, addressing challenges in forecasting and market behavior analysis within a unique regulatory environment.

Contribution

It introduces a novel modeling approach for US residential electricity consumption and tests hypotheses related to market behaviors and import-export dynamics.

Findings

Model effectively captures consumption patterns

Provides insights into import-export influences

Supports hypothesis testing on market behaviors

Abstract

The United States' power market is featured by the lack of judicial power at the federal level. The market thus provides a unique testing environment for the market organization structure. At the same time, the econometric modeling and forecasting of electricity market consumption become more challenging. Import and export, which generally follow simple rules in European countries, can be a result of direct market behaviors. This paper seeks to build a general model for power consumption and using the model to test several hypotheses.