Areas of Expertise (4)
Energy Policy and Climate Change
Electricity Deregulation, Market Formation and Competition
US and International Airline Competition
Oil and Gasoline Market Pricing and Competition
Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business and faculty director of the Energy Institute at Haas. He is also Director emeritus of the University of California Energy Institute (1994-2014). He received his AB from UC Berkeley and PhD in Economics from MIT. His research focuses on business competition, strategy, and regulation. He has published extensively on the airline industry, the oil and gasoline industries, and electricity markets. His current research projects include the economics of renewable energy, economic policies for reducing greenhouse gases, and alternative models of retail electricity pricing. Borenstein is also a research associate of the National Bureau of Economic Research in Cambridge, MA. He served on the Board of Governors of the California Power Exchange from 1997 to 2003. During 1999-2000, he was a member of the California Attorney General's Gasoline Price Task Force. In 2010-11, Borenstein was a member of U.S. Secretary of Transportation Ray LaHood's Future of Aviation Advisory Committee. In 2012-13, he served on the Emissions Market Assessment Committee, which advised the California Air Resources Board on the operation of California’s Cap and Trade market for greenhouse gases. In 2014, he was appointed to the California Energy Commission’s Petroleum Market Advisory Committee, which he chaired from 2015 until the Committee was dissolved in 2017. Since 2015, he has served on the Advisory Council of the Bay Area Air Quality Management District. In 2019, he was appointed to the Governing Board of the California Independent System Operator.
Massachusetts Institute of Technology: PhD, Economics
UC Berkeley: BA, Economics
Honors & Awards (7)
International Association for Energy Economics, Outstanding Contributions to the Profession Award
Distinguished Fellow of the Industrial Organization Society
Distinguished Faculty Mentoring Award (for graduate student mentoring), UC Berkeley
Distinguished Service Award, Public Utility Research Center, University of Florida
Earl F. Cheit Award for Excellence in Teaching, Full-Time MBA Program
Michigan Economic Society Undergraduate Teaching Award
National Science Foundation Research Grant #SES-8711576 “Efficiency in the Allocation of Operating Licenses”
1987 – 1990
Selected External Service & Affiliations (9)
- 2019 - present, Member, California ISO Board of Governors
- 2015 – 2017, Chair, Petroleum Market Advisory Committee, California Energy Commission
- 2015 – present, Member, Bay Area Air Quality Management District, Advisory Council
- 2012 – 2013, Member, Emissions Market Assessment Committee, California Air Resources Board
- 2010 – 2011, Member, U.S. Department of Transportation, Future of Aviation Advisory Committee
- 1997 – 2003, Member, Governing Board of California Power Exchange Corporation
- 1995 – 2000, Editor, Journal of Industrial Economics
- Past co-editor or editorial board member: Editorial Board Member, American Economic Journal: Economic Policy, Journal of Economic Literature, Journal of the Association of Environmental and Resource Economists, Review of Economics & Statistics, International Journal of Industrial Organization, Journal of Industrial Economics
- 1992 – present, Research associate, National Bureau of Economic Research
Positions Held (1)
At Haas since 1996
2009 – present, E.T. Grether Chair in Business Administration and Public Policy 1996 – present, Professor, Haas School of Business 2009 – 2014, Director, Energy Institute at Haas 1994 – 2014, Director, University of California Energy Institute 1994 – 1996, Professor of Economics, Department of Economics, UC Davis 1990 – 1994, Associate Professor of Economics, Department of Economics, UC Davis 1983 – 1990, Assistant Professor of Economics and Public Policy, Department of Economics and Institute of Public Policy Studies, University of Michigan 1978 – 1979, Staff Economist, Office of Economic Analysis, US Civil Aeronautics Board
Media Appearances (19)
Here’s why your electricity prices are high and soaring
CBS News online
PG&E customers pay about 80% more per kilowatt-hour than the national average, according to a study by Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy. California’s retail prices are out of line with utilities across the country, the report found.
Why every state is vulnerable to a Texas-style power crisis
The Texas power grid collapse during the recent snowstorm was a disaster that should have been foretold, as the grid had been creaking for years. But it could happen anywhere. "I don’t think anyone should be getting smug about this," said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas. "This is going to be a challenge everywhere."
California’s Climate Contradictions
The Wall Street Journal online
The contradictions of green energy policies are becoming more obvious in the real world, and now comes more evidence in a new study of California’s electricity rates, the Wall Street Journal's editorial board argues. "California has charted an ambitious course towards decarbonizing its economy," the study by Prof. Severin Borenstein and nonprofit Next 10 says. "At the same time, California has among the highest electricity prices in the continental U.S. These two facts create a tension: decarbonizing the economy most likely requires electrification of transportation and space and water heating, but high prices push against such a transition. High prices also have troubling implications for equity and affordability."
‘I was just panicking’: Many Texans face sky-high electricity bills after winter storms — what can they do?
Many people lost power during the recent freezing Texas weather, but for those who had it, the high demand and short supply led to astronomically high wholesale prices. "It sounds like it was just a genuine power shortage, and when the power is that short the price goes to the price ceiling," said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy.
California’s rate inequality is likely to worsen as energy transition advances
pv magazine online
Residential customers of California’s three largest investor-owned utilities are being charged as much as two to three times more for electricity than it actually costs to produce and distribute, according to a new report co-authored by Prof. Severin Borenstein. He presented the report findings at a hearing before state utility regulators on Feb. 24.
Report: California electricity rate structure is not equitable
Sacremento Business Journal online
“Lower- and middle-income households are bearing a far greater cost burden for the state's power system than seems fair,” said Severin Borenstein, faculty director of the Energy Institute, in a news release from San Francisco-based Next 10. Borenstein is also a member of the board of governors of the Folsom-based California Independent System Operator, or California ISO, which manages the state’s wholesale power market.
Should California Link Electricity Bills to Customer Incomes?
Greentech Media online
California electricity rates could rise even faster over the next decade, as utilities harden their grids against wildfires, grow their share of net-metered rooftop solar, and add other costs that will be passed through to utility customers. But recovering those costs by charging customers by the kilowatt-hour pushes too much of the burden on those least able to pay, according to a new report co-authored by Prof. Severin Borenstein.
Utility Bills Based on Household Income
PBS SoCal online
At a state utilities commission meeting on Wednesday, Prof. Severin Borenstein presented a proposal to change power bills so they are based on household income. This would apply to investor-owned utilities, whose rates are regulated by the state government, and can charge for things like wildland fire prevention, electric vehicle charging stations, and subsidies for low-income customers. Borenstein's proposal would prioritize low-income households so they pay equitable amounts of the power structure we all use.
California's electricity prices are so high that researchers worry people won't ditch fossil fuel
San Francisco Chronicle online
A new report co-authored by Prof. Severin Borenstein concluded that California’s electricity prices are growing so high that they threaten the state’s ability to convince enough people to ditch fossil fuel-powered cars and appliances. The high electricity rates come from utilities bundling in a myriad of costs such as subsidies for rooftop solar and low-income customers, as well as wildfire mitigation measures. Borenstein said the state should look at paying for things like wildfire risk reduction through income or sales taxes instead. Sky-high electricity rates "will be a huge discouragement to using electricity for things that we need people to adopt if we’re going to decarbonize the economy," he said.
Why the power grid failed in Texas and beyond
Los Angeles Times online
"One big difference is that leadership in California recognizes that climate change is happening, but that doesn't seem to be the case in Texas," said Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy.
The Heart of California’s Darkness
National Review online
Many conservatives, business groups, policymakers, and environmentalists have disagreed on the exact cause of California's recent rolling blackouts, the article states. However, a renewables-dominant grid isn't to blame. "Some critics are saying the blackouts demonstrate that California can't pull off a renewables-dominant grid, but that's the wrong lesson," writes Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and the faculty director of the Energy Institute at Haas.
United Airlines layoffs to start next month
FOX2 KTVU online
The air transportation industry has taken a nosedive, and it's probably not going to recover any time soon on its own. Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas, said that if the government subsidized the industry, it would be brutally expensive, and that at some point, the market should determine whether companies should survive.
California Braces for More Blackouts as Heat Wave Scorches West
The Wall Street Jounral online
Prof. Severin Borenstein said the California blackouts highlight the need for more large-scale batteries to store renewable energy that can be deployed when production is down. The state also needs programs designed to encourage customers to conserve energy when necessary, he said.
California learns even flexible Emissions Markets won’t guarantee price stability
Energy Post online
In May, emissions allowance prices hit rock bottom in California. How can cap-and-trade work properly when prices are so volatile and difficult to predict? It makes life very difficult for businesses and investors, not to mention the state. Changes to the rules are being proposed to introduce more flexibility into the effective price floors, ceilings and the availability of allowances. But Severin Borenstein at the Energy Institute at Haas explains that there will always be a limit on how stable prices can be.
How Covid-19 will change air travel as we know it
BBC Future online
While fewer people are flying, airfares aren't rock bottom. That's because some 30 percent of the world's planes are grounded right now. But fare hikes in the short run aren’t likely, according to Prof. Severin Borenstein. Fares are "likely to remain quite moderate, because fuel costs are low and the airlines are flying more capacity than demand can support," he said.
Column: California’s gas tax is going up again. You should be pleased
Los Angeles Times online
Taxes, like those on gasoline, allow governments to build the infrastructure that supports the economy, said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and the faculty director of the Energy Institute at Haas. "This tax increase will cost the typical family of four 13 cents per day, or $4 per month," he said. "That’s not nothing, but compared to all of the other costs of living in California, it’s not a lot."
Why do gasoline prices drop more slowly than oil prices?
San Diego Union-Tribune online
Oil prices have fallen, but gas prices aren't reflecting that quick drop. There are many other factors that go into fuel pricing, including what Prof. Severin Borenstein has called the "mystery surcharge" which, since 2015, has caused a differential of between 20 to 50 cents a gallon that California motorists have paid that cannot be accounted for after taxes and fees.
Energy economics class inspires students to pursue clean energy careers
MIT News online
A favorite element of a popular energy economics class at MIT is the Electricity Strategy Game, modeled on the world of deregulated wholesale electricity markets. The game was created at Berkeley Haas by Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and the faculty director of the Energy Institute at Haas, and affiliated Prof. James Bushnell.
Will your electricity bill go up if you’re working from home?
The extra energy you use working from home is inconsequential, said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and the faculty director of the Energy Institute at Haas. "Even 10 extra hours is less than $5 [per day],” Borenstein said.
Selected Papers & Publications (6)
Expecting the Unexpected: Emissions Uncertainty and Environmental Market DesignEnergy Institute at Haas Working Paper #274
Severin Borenstein, James Bushnell, Frank A. Wolak, and Matthew Zaragoza-Watkins
The U.S. Electricity Industry After 20 Years of RestructuringAnnual Review of Economic
Severin Borenstein and James Bushnell
The Trouble with Electricity Markets: Understanding California’s Restructuring DisasterJournal of Economic Perspectives
Measuring Market Inefficiencies in California’s Restructured Wholesale Electricity MarketAmerican Economic Review
Severin Borenstein, James Bushnell, and Frank Wolak
Competition and Price Dispersion in the U.S. Airline IndustryJournal of Political Economy
Severin Borenstein and Nancy Rose
Hubs and High Fares: Dominance and Market Power in the U.S. Airline IndustryRand Journal of Economics
Energy and Environmental Markets