Do Renewables Portfolio Standards Increase Electricity Prices? A Synthetic Control Approach

We examine whether state level Renewable Portfolio Standards (RPS) influence prices in the electricity market. While vital environmental goals underlie the rationale for RPS there exists a potential for negative welfare impacts through increased costs of electricity generation forcing consumers to allocate a larger portion of their income to energy consumption. We employ the Synthetic Control Method (SCM) for comparative case study and focus on Texas, an early adopter of RPS and arguably a success story. We find that RPS increased residential, industrial and total electricity prices while commercial prices were unaffected.