Lawrence Berkeley National Laboratory

Electricity rate subsidies are an important policy mechanism to help low-income households afford necessary energy services, bringing substantial quality of life benefits to roughly 30% of California households. Resulting increases in consumption may unintentionally increase costly peak demand while also raising emissions of greenhouse gases and criteria air pollution from electricity generation, potentially motivating additional measures to shift consumption to hours with fewer unintended consequences. In a difference-in-differences study of interval data from over 30 000 northern California dwellings, we find that enrollment in the California Alternate Rates for Energy subsidy is associated with a ∼13% increase in electricity consumption, varying modestly across regions and seasons, increasing by an additional ∼3% during summer peak times. We find that peak demand costs associated with CARE are about $45 M per year but could fall by ∼1/3 with peak shifting to level demand.