Dr. Klaus Moeltner, Virginia Tech, on the Economics of Electricity

This week, my guest is Dr. Klaus Moeltner of Department of Agriculture and Applied Economics at Virginia Tech University. He has been researching the effects of power outages and consumers’ willingness to pay for grid improvements and uninterrupted electricity supply.

Interesting and important research, given the context of recent wintry weather in the Mid-Atlantic, a spike in natural gas prices due to the cold snap, and the debate over rate caps and reinvestment with Appalachian Power and Dominion Energy.

Over the course of our conversation, we discuss the impacts of weather and climate change on electrical distribution, differences in preference due to regional or geographic location (urban, suburban, rural), preferences due to age, gender, education, and a myriad of other factors. We also talk about the importance of electricity in the delivery of critical infrastructure services, like banking, communication, medical, transportation, sanitation, wastewater management, and food distribution services.

Key point: “From a public policy perspective, our findings are perhaps best interpreted as strong evidence that a widespread loss of power harms residential customers through more than just the interruption of front-door service. Protecting vital elements of the public infrastructure may be just as important, if not more so, than assuring adequate power flow to the neighborhood grid.”

Links of note:
Shifting temperatures to alter household electricity expenses, researchers find
Effect of global warming on willingness to pay for uninterrupted electricity supply in European nations
Valuing electricity-dependent infrastructure: An essential-input approach
Governor Northam Statement on Rate Freeze Repeal Legislation
HB 1558 Electric utility regulation; grid modernization, energy efficiency programs.
Cold snap renews need for pipeline
Dr. Moeltner’s Bio

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