Can Digitalization Improve Public Services? Evidence from Innovation in Energy Management
Robyn Meeks, Jacquelyn Pless, and Zhenxuan Wang
This paper examines how digitalization impacts public service provision through a study of the U.S. power sector. We exploit the staggered timing of electric utilities’ investments in “smart” meters and find that electricity losses per unit sold decrease by 3.6%. This efficiency improvement is driven by a 5.9% reduction in total losses and 1.2% increase in sales. Additional results suggest this occurs through improvements in energy management. The effects are driven by government-owned utilities as opposed to privately-owned. Through a supplementary analysis of within-utility electricity reliability in Texas, we also find that digitalization decreased power outage duration but not frequency.
Keywords: digitalization; public services; energy management; electric utilities
JEL Codes: O30, L94, H11, Q40, H54, M15, L33