Agricultural Economics Department
First Advisor
Karina Schoengold
Second Advisor
Taro Mieno
Date of this Version
12-2017
Document Type
Thesis
Citation
A thesis presented to the faculty of the Graduate College at the University of Nebraska in partial fulfillment of requirements for the degree of Master of Science
Major: Agricultural Economics
Under the supervision of Professors Karina Schoengold and Taro Mieno
Lincoln, Nebraska, December 2017
Abstract
The thesis uses cross sectional data from the year 2009 to analyze irrigator choice of electricity contract. The data includes irrigators from the Midwest Electric Cooperative Corporation (MECC), which covers portions of three of Nebraska’s Natural Resource Districts (the Middle Republican, Twin Platte, and Upper Republican NRDs). Each of these institutions tries to reduce the pressure its users place on limited natural resources.
To accomplish this the MECC has established interruptible contracts with irrigators. These contracts allow the MECC to control the electricity supply for an irrigator’s well for a pre-determined number of days, which allows it to better manage stress on the electricity grid. In return, the MECC provides a discount on the irrigator’s electricity charge. For the NRDs, groundwater allocation limits are used to restrict the amount of water an irrigator can use. However, if interruptible electricity contracts increase the amount of water an irrigator extracts, these policies may not jointly be as effective as possible. Determining if this is the case requires an understanding of how an irrigator chooses his/her electricity contract. The objective of this study is to determine which factors affect an irrigator’s choice of contract, and how those factors are correlated with water and energy use. If these interruptible contracts conflict with the goals of either institution, policy changes could help to achieve agency goals.
Results show that well yield (defined as well capacity in gallons per minute) is positively associated with total water use and uncorrelated with total energy use, and that soil quality significantly affects both outcomes. A multinomial logistic regression is used to determine what factors affect an irrigator’s contract choice. We then use the results of the model to predict contract choice. Results show that irrigators with a low well yield (defined as gallons per minute of capacity) and a low water holding capacity in the soil are less likely to select interruptible energy supply contracts.
Advisors: Karina Schoengold, and Taro Mieno
Comments
Copyright 2017, Taylor Hackbart