Does Power Sector Deregulation Promote or Discourage Renewable Energy Policy? Evidence from the States, 1991-2012

Both within the United States and across the world, power sector deregulation has changed the environment in which governments formulate renewable energy policy. Utilizing data from U.S. states for the 1991-2012 period, this article shows that there is no difference in the adoption of new renewable energy policy in states that have and have not already gone through power sector deregulation. However, the evidence also shows that governments formulate renewable energy policy as part of a legislative package for power sector deregulation in a dynamic we call issue linkage. While power sector deregulation is neither an impediment nor an impetus to renewable energy policy, the strategic challenge of passing deregulatory legislation requires concessions to constituencies that prefer renewables. For policy makers, the results are important because they indicate that deeper reforms in electricity generation are consistent with more ambitious renewable energy policy.