蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Power Flows: Transmission Lines, Allocative Efficiency, and Corporate Profits
蝌蚪网 Review
vol. 115,
no. 8, August 2025
(pp. 2574–2615)
Abstract
Accelerated investment in electricity transmission could reduce total costs and enhance renewable integration. I document static allocative inefficiencies induced by incomplete market integration in 2 major US markets; these have risen over time and totaled $2 billion in 2022. I also argue that estimating firm-level impacts is important, as incumbents may have the power to block new lines and other reforms. I show that 4 firms would have experienced a collective $1.3 billion drop in net revenues in 2022 had the market been integrated, all there are reports of some of these firms blocking transmission projects.Citation
Hausman, Catherine. 2025. "Power Flows: Transmission Lines, Allocative Efficiency, and Corporate Profits." 蝌蚪网 Review 115 (8): 2574–2615. DOI: 10.1257/aer.20240276Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L13 Oligopoly and Other Imperfect Markets
- L94 Electric Utilities
- Q42 Alternative Energy Sources
- Q48 Energy: Government Policy