11 April — Improving Infrastructure Service Management and Quality with Smart Technology: Evidence from the Electricity Sector
Date: 11 April 2022
Time: 12:00pm ET
Location: Wean Hall 3701 & via Zoom
Speaker: Jacquelyn Pless
Topic: Improving Infrastructure Service Management and Quality with Smart Technology: Evidence from the Electricity Sector
Abstract: Electricity outages are on the rise in the U.S. due to climate change and an aging infrastructure, creating substantial economic and social losses. In this paper, we show how advanced metering infrastructure—a communication network comprised of smart meters and data management systems that provide real-time information on electricity production and consumption—enhances grid reliability. We use granular data on power outages and implement a difference-in-differences research design to study smart meter rollouts in Texas. We find that, on average, the duration of outages decreases by 6 percent. While there is no effect on outage frequency on average, this masks substantial heterogeneity. Outage frequency and duration decrease by 7 and 18 percent, respectively, when a “high” proportion of meters are smart. We also show that the effects are overwhelmingly driven by service providers leveraging the technology rather than consumers. When utilities are able to execute load control by shutting down customers’ equipment on short notice, smart meters reduce outage duration by 55 percent and frequency by 16 percent, whereas providing consumers with data access has little to no effect. Our findings suggest that smart meters enhance reliability by strengthening energy management practices, and thus it is important for policy to enable utility-side capabilities for such technology to improve quality of service.
