Daylight Savings Wastes Money

From the Wall Street Journal:

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For decades, conventional wisdom has held that daylight-saving time, which begins March 9, reduces energy use. But a unique situation in Indiana provides evidence challenging that view: Springing forward may actually waste energy.

Up until two years ago, only 15 of Indiana's 92 counties set their clocks an hour ahead in the spring and an hour back in the fall. The rest stayed on standard time all year, in part because farmers resisted the prospect of having to work an extra hour in the morning dark. But many residents came to hate falling in and out of sync with businesses and residents in neighboring states and prevailed upon the Indiana Legislature to put the entire state on daylight-saving time beginning in the spring of 2006.

Research on the impact of extending daylight-saving time across Indiana found:

• Residential electricity usage increased between 1% and 4%, amounting to $8.6 million a year.

• Social costs from increased emissions were estimated at between $1.6 million and $5.3 million per year.

• Possible social benefits -- enhanced public health and safety and economic growth -- were not studied.

Indiana's change of heart gave University of California-Santa Barbara economics professor Matthew Kotchen and Ph.D. student Laura Grant a unique way to see how the time shift affects energy use. Using more than seven million monthly meter readings from Duke Energy Corp., covering nearly all the households in southern Indiana for three years, they were able to compare energy consumption before and after counties began observing daylight-saving time. Readings from counties that had already adopted daylight-saving time provided a control group that helped them to adjust for changes in weather from one year to the next.

Their finding: Having the entire state switch to daylight-saving time each year, rather than stay on standard time, costs Indiana households an additional $8.6 million in electricity bills. They conclude that the reduced cost of lighting in afternoons during daylight-saving time is more than offset by the higher air-conditioning costs on hot afternoons and increased heating costs on cool mornings.

"I've never had a paper with such a clear and unambiguous finding as this," says Mr. Kotchen, who presented the paper at a National Bureau of Economic Research conference this month.

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In 2005, Reps. Edward J. Markey of Massachusetts and Fred Upton of Michigan drafted legislation that would extend daylight-saving time nationwide. Congress approved the amendment, which called for clocks to be sprung forward a week earlier in the spring and to be set back three weeks later in the fall. The change went into effect last year.