Renewable Energy Generation and Demand-Side Management of Electric Utilities

This dissertation is composed of three essays dealing with renewable energy generation and the demand-side management (DSM) of electric utilities. The first two essays tackle small-scale and large-scale supply of electricity from renewable sources. The third one looks into the implications of context and ownership form of electric utilities for DSM. Understanding the politics and policy of renewable energy generation and the performance of DSM programs is the overall theme of this dissertation. The first essay highlights the role of local governments in institutionalizing distributed renewable energy generation by leveraging their authority on land use to permit small-scale systems located at customer site. It examines the factors shaping policy adoption on distributed renewable energy generation through the lens of transaction-cost politics. It teases out the political exchanges and the attendant transaction costs arising from adopting a policy on distributed renewable energy generation. It examines the transaction resources that enable actors to overcome these barriers. The second essay focuses on renewable energy generated by investor-owned utilities. It examines the transaction costs salient to large-scale renewable energy generation in regulated and deregulated states. It contends that renewable energy generation varies in the way the policy environment shapes the transactions of actors and the way they deal with transaction costs. Transactions are specific to the characteristics and location of large-scale systems, the community being served, the political institutions present, and the policies being implemented. Geographic Information System (GIS) is used to delineate the service areas of investor-owned utilities as spatial units of analysis. Spatial regression analysis is applied to account for the idiosyncratic nature of electricity supply and the legacy system of vertically integrated utilities. The third essay examines the contextual drivers that affect the performance of DSM programs, that is, the energy efficiency gains of municipal-owned utilities (MOUs) and electric cooperatives. These factors include the demographic profile and housing stock that characterize the utilities' service territories, and the environmental constituencies, political support, and energy-related polices operating in those areas. This essay complements existing literature on DSM and energy use, which has largely focused on rationalist models and pro-environmental behavior of individual consumers. It also looks into how the ownership form of electric utilities affects the relationship between these contextual drivers and energy efficiency gains. Focus is on MOUs and electric cooperatives since DSM programs generally reside in these utilities and are not implemented by third-party entities. MOUs and electric cooperatives are similar in size and scope but differ in ownership form, governance structure, and internal controls.