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Severin Borenstein - Haas School of Business, University of California, Berkeley. Berkeley, CA, UNITED STATES

Severin Borenstein

Professor of the Graduate School | E.T. Grether Chair in Business Administration and Public Policy | Faculty Director, Energy Institute at Haas | Haas School of Business, University of California, Berkeley

Berkeley, CA, UNITED STATES

Expert on the economics of renewable energy, economic policies for reducing greenhouse gases, and electricity pricing

Social

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

About

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.

Education (2)

Massachusetts Institute of Technology: PhD, Economics

UC Berkeley: BA, Economics

Honors & Awards (7)

International Association for Energy Economics, Outstanding Contributions to the Profession Award

2015

Distinguished Fellow of the Industrial Organization Society

2015

Distinguished Faculty Mentoring Award (for graduate student mentoring), UC Berkeley

2005

Distinguished Service Award, Public Utility Research Center, University of Florida

2005

Earl F. Cheit Award for Excellence in Teaching, Full-Time MBA Program

2016, 1997

Michigan Economic Society Undergraduate Teaching Award

Fall 1987

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 (20)

Fact-checking Warnock’s statement that a drop in oil prices doesn’t cause major drop in gas prices

PolitiFact  online

2022-04-20

Poynter Politifact fact-checked Sen. Rafael Warnock's assessment that "while the initial increase in oil prices resulted in a near instantaneous increase in gas prices for consumers, the subsequent decrease in crude oil prices has failed to meaningfully provide relief for Georgia's families at the pump.” Over longer time periods — beyond a few weeks — prices at the pump tend to follow changes in crude oil prices both up and down. Severin Borenstein, a Berkeley professor and expert on the oil and gas industry, echoed this point: "Gasoline prices do eventually go back to the level one would expect given the price of crude oil."

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Is cryptocurrency the magical Texas route to a stable power grid? Or just wishful thinking?

Houston Chronicle  online

2022-04-18

In this op-ed, Severin Borenstein, professor of the graduate school, writes about Gov. Abbott's proposal to increase electricity demand from cryptocurrency mining. Borenstein questions if it will work.

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Los Angeles gas prices drop for 15th consecutive day following ‘unprecedented rise’

Los Angeles Times  online

2022-04-12

Gas prices in the Los Angeles metropolitan area dropped for the 15th consecutive day after Pres. Joe Biden at the end of March ordered the release of 1 million barrels of oil per day for six months. “That doesn’t sound like it would do it a lot, but it actually can do a bit—particularly combined with releases from other strategic petroleum reserves around the country,” said Severin Borenstein, professor of the graduate school. “That’s what’s pushing down prices.”

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Benicia pier fire: Bay Area car dealers worry port closure will delay vehicle deliveries

ABC 7  online

2022-04-11

A major shipping port in the East Bay remains closed after a four-alarm fire heavily damaged part of the Valero Benicia Refinery, which processes crude into gasoline, diesel and jet fuel. If the refinery cannot operate, it could mean a big hit to the California market, said Severin Borenstein, professor of the graduate school. "I'd expect prices to shoot up farther just as they were starting to come down," he said.

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Plan For Higher Ethanol Blend Gas During Summer To Save Drivers a Few Cents Per Gallon

KPIX  online

2022-04-11

The Environmental Protection Agency will suspend the normal summertime ban on gas made with more ethanol. But in California it won’t make much difference, said Severin Borenstein, professor of the graduate school. “The effect on gasoline prices will be a few pennies at most.”

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Why gasoline prices remain high even as crude oil prices fall

The Wall Street Journal  online

2022-04-11

Economists say that while refiners may see some temporary benefits from higher gas prices, it’s the companies and countries that actually extract the oil that are making cash. “Anybody who’s producing oil is making boatloads of money right now,” said Severin Borenstein, Professor of the Graduate School. “That doesn’t mean oil producers are doing anything anticompetitive—just that they are the lucky beneficiaries of a disrupted market that is driving the market price way above their production costs.”

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Newsom: ‘More work to be done’ on California net metering solar proposal

The San Diego Union-Tribune  online

2022-01-14

Californians without solar panels pay about $245 more in electric bills per year than customers who have installed solar panels on their rooftops, an equity problem pointed out by experts like Prof. Severin Borenstein. He said a new proposal to change net metering isn’t supposed to punish those with solar, but rather “to correct the policy path we are on in which the only people left paying for the grid — the grid that all of us are going to be using for a long time — will be renters and low-income customers.”

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"If you look pre-COVID" under President Donald Trump, "we didn't import a single barrel of oil from Saudi Arabia.”

PolitiFact  online

2021-12-01

Fox News host Sean Hannity claimed that under Pres. Trump the U.S. completely scrapped its reliance on oil imports from Saudi Arabia and other Middle Eastern countries. 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's untrue. "In the last few years, the U.S. has come very close to producing as much oil as it consumes," he said. "But that does not mean we don't import oil. We still import and export to match crude locations and types most efficiently with refineries."

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Hydropower decline adds strain to power grids in drought

Associated Press  online

2021-10-10

Severe drought across the West drained reservoirs this year, slashing hydropower production and further stressing the region’s power grids. It's unfortunate because hydropower is a relatively flexible, renewable energy source. “Hydro is a big part of the plan for making the whole system work together,” said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas. He noted that hydropower is important as the state works to build out its electricity storage options.

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What the U.K. and Texas energy crises have in common

Bloomberg  online

2021-09-23

This opinion columnist cites a report by Prof. Severin Borenstein and his Energy Institute at Haas colleagues Meredith Fowlie and James Sallee finding that California's electricity pricing structure is inequitable, and also is hurting efforts to decarbonize. Utilities have bundled fees for policy goals such as residential solar subsidies and wildfire mitigation onto electric bills, resulting in sky-high rates that discourages wider electrification. This structure amounts to regressive taxation that hurts lower-income people. General taxation to fund these programs could be better matched with incomes, the report argues.

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Newsletter: How solar panels on farmland could help California fix its water and power crises

Los Angeles Times  online

2021-07-08

Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas, has questioned the stability of community choice power agencies, but says the programs “are doing something useful” by providing competition in the energy marketplace. While he’s still concerned about the potential for bankruptcies, he said he thinks the sector is in good shape. “Now that this is a serious industry, they are starting to adopt serious industry practices,” he said.

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Solar legislation would have long-lasting effects on industry statewide

The Coast News Group  online

2021-06-02

A new California bill will eliminate some of the established benefits around solar. Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas, says that households with solar are disproportionately wealthy, as well as disproportionately white. “So when a customer installs solar, their share of the fixed costs are shifted to other ratepayers who are poorer on average. Net energy metering hurts the poor. It’s that simple.”

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Get Ready for $5 Gasoline if You Live in California—or if You Don’t

The Wall Street Journal  online

2021-05-28

At the start of this year, California drivers were paying the highest average state and local gas taxes in the country— 63 cents a gallon, compared with the 50-state average of 36.8 cents. The California Air Resources Board also requires gasoline retailers to sell an extra-clean blend, which adds another 10 cents a gallon to the price, according Prof. Severin Borenstein.

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California eyes rooftop solar policy changes. The industry says its future hangs in the balance

San Francisco Chronicle  online

2021-05-21

A report by Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy, found that greater adoption of rooftop solar panels in the state "has disproportionately shifted cost recovery onto non-solar customers." He said the growth of rooftop solar under current net metering rules was also one significant driver of high electric rates and estimated that overhauling net metering could save the average household about $75 per year.

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Can California's power grid handle another hot summer?

KCRA 3 (NBC)  online

2021-05-19

Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy, says cleaning up our energy grid is even more challenging as we face higher temperatures due to climate change. "That's a bigger challenge because California imports about a quarter of its power," said Borenstein. "And during our extreme heatwaves we have historically been really dependent on bringing power in. And last August there was a lot less than we would have hoped for."

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California's dilemma: How to control skyrocketing electric rates while building the grid of the future

Utility Dive  online

2021-04-26

Power affordability is a growing concern as California works toward a dynamic new power system to meet the climate crisis and related extreme weather events. Severin Borenstein, E.T. Grether Chair in Business Administration and Public Policy, argues that income-based electricity rates would be more progressive than the current pricing structure, which bundles in a variety of costs and puts a disproportionate burden on lower-income residents. "There is no easy solution," he said. "An income-based fixed charge is the best alternative."

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Here's why California gas prices are so high compared to other states

San Francisco Chronicle  online

2021-03-27

California gas prices are a dollar higher per gallon than the national average. “The overall differential is due largely to higher taxes and environmental fees like cap and trade and the low carbon fuel standard,” said Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas. Even factoring in those extra fees, Borenstein said that since 2015 Californians have paid an extra 25 to 30 cents per gallon on top of that—which he calls “the mystery gasoline surcharge.”

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California power grid operators try to avert blackout replay

Associated Press  online

2021-03-24

The California Independent System Operator’s board approved several policies to avoid rolling blackouts, including various pricing incentives. But governing board member Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas, questioned whether companies might try to game the system through pricing changes that would compensate them when prices spiked.

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Reform drive focuses on rates paid to homeowners with rooftop solar

The Bakersfield Californian  online

2021-03-20

Research by Prof. Severin Borenstein, the E.T. Grether Chair in Business Administration and Public Policy and faculty director of the Energy Institute at Haas, found that while California utilities' electricity rates greatly exceed their actual cost of providing energy, lower- and average-income ratepayers are "increasingly having to cover high fixed costs from a shrinking base as wealthier customers leave for rooftop solar."

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Here’s why your electricity prices are high and soaring

CBS News  online

2021-03-19

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.

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Selected Papers & Publications (6)

Expecting the Unexpected: Emissions Uncertainty and Environmental Market Design


Energy Institute at Haas Working Paper #274

Severin Borenstein, James Bushnell, Frank A. Wolak, and Matthew Zaragoza-Watkins

2018

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The U.S. Electricity Industry After 20 Years of Restructuring


Annual Review of Economic

Severin Borenstein and James Bushnell

2015

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The Trouble with Electricity Markets: Understanding California’s Restructuring Disaster


Journal of Economic Perspectives

Severin Borenstein

2002

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Measuring Market Inefficiencies in California’s Restructured Wholesale Electricity Market


American Economic Review

Severin Borenstein, James Bushnell, and Frank Wolak

2002


Competition and Price Dispersion in the U.S. Airline Industry


Journal of Political Economy

Severin Borenstein and Nancy Rose

1994

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Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry


Rand Journal of Economics

Severin Borenstein

1989

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Teaching (1)

Energy and Environmental Markets

MBA212-1

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