NCPA - National Center for Policy Analysis


October 26, 2009

A study from Stanford University analyzes factors that lead to California's lower per-capita electricity consumption.  Proponents of regulation and cap and trade often point to the "success" California has had reducing per-capita electricity consumption (Note the reduction is relative to per-capita consumption in the rest of the United States.)

The study finds that the vast majority of the difference in electricity use is explained by factors other than policy:

  • For instance, the mild weather and California's relatively higher use of natural gas for space heating, led to a 15.8 percent reduction in per-capita residential electricity use.
  • Differences in household size (more people per household = lower per-capita use) and its higher urban/rural ratio (urban households live in smaller dwellings that use less energy) reduce per-capita residential electricity consumption another 21.4 percent.
  • California's different mix of industrial users, by itself, accounts for a 38 percent drop in per-capita industrial electricity use.
  • Less commercial floor space per capita reduces per-capita commercial electricity consumption by 27 percent.

When it is all added up, the authors conclude that California's policies account for no more than 23 percent of the difference in per-capita electricity consumption.  Since they haven't even looked at the direct impact of California's 50 percent higher electricity prices, that 23 percent could be grossly overestimating even this reduced policy impact.

In short, more than 75 percent of the touted benefits of California's costly energy policies are actually attributable to factors other than the policies.  The basket-case economy that California has woven for itself is further confirmation that the effectiveness of its energy policies is overblown, says the Heritage Foundation.

Source: David Kreutzer, "California's Energy Policy Not Responsible for Reduced Consumption," Heritage Foundation, October 23, 2009; based upon: Anant Sudarshan and James Sweeney, "Deconstructing the 'Rosenfeld Curve,'" Stanford University, June 1, 2008.

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