Abstract
This study compares among fossil fuel power plants in PJM and California ISO by their unified (operational and environmental) performance. DEA (Data Envelopment Analysis) is used as a methodology. This empirical study obtains two implications on US energy policy. One of the two policy implications is that California ISO outperforms PJM in terms of the three unified efficiency measures. The result implies that strict regulation on undesirable outputs, as found in California, is important in enhancing the performance of US fossil fuel power plants. The other policy implication is that coal-fired and gas-fired power plants in PJM and California ISO need to reduce their operational sizes or introduce technology innovation on desirable and undesirable outputs and/or new management for environmental protection within their operations.
