Residential Electricity Demand in El Paso

This study analyzes the demand for residential electricity in El Paso, Texas, USA. Annual data are provided by El Paso Electric Company covering the period from 1977 to 2014. This study reports a negative long-run income elasticity for residential electricity demand. Per customer residential electricity usage declines by 0.68 percent for every 1-percent increase in real per capita income over the long run, indicating that electricity is treated as an inferior good by households in this metropolitan economy. That result runs counter to many earlier studies but corroborates recent empirical evidence for Seattle, Washington, and other regions of the United States. Further examination of residential electricity consumption behavior is warranted. Rate policy issues are also discussed.