Municipal-owned utilities and demand side management

Municipal-owned utilities perform an important role in local government efforts. Municipal ownership of utility operations provides advantages in involving citizens in sustainability and energy-efficiency practices. This paper explores the variation in municipal-owned utilities investment in energy-efficiency strategies by examining how spending on energy-efficiency strategies is affected by costs, politics, and fiscal conditions, and citizen demand. Using a unique data set of the 145 municipal-owned utilities in cities with populations over 25,000, we estimate a Heckman Selection Model to test our predictions. Decisions to adopt energy-efficiency programs are associated with siting difficulties and available generation capacity. The level of energy-efficiency expenditures is associated with a city level political structure and the availability of local retail partners. The implications of these findings for theory and practice are discussed in conclusion.