Urban electricity demand in response to price surges: Evidence from three U.S. cities

Urban electricity systems are increasingly exposed to volatile energy prices, yet the behavioral response of consumers to extreme price shocks remains poorly quantified. The historic surge in electricity prices in many world cities from late 2022 to early 2023 provides a unique opportunity to assess how consumers adjust their demand under crisis conditions. Leveraging ten years of high-resolution electricity load and climate data from New York City, Boston, and Houston, we develop a novel Energy Modulation Indicator (EMI) to isolate behavioral changes in electricity usage while controlling for climatic effects. EMI captures monthly shifts in the load–temperature relationship, enabling monthly detection of price-induced demand changes. Our analysis reveals two key findings: (1) a statistically detectable positive association between electricity price increases and subsequent reductions in electricity demand, and (2) a consistent behavioral response lag of 3–4 months following price shocks, highlighting the delayed nature of demand adaptation. This result is stable across alternative model specifications and statistical validation, underscoring the non-instantaneous nature of demand adaptation. In this sense, EMI may serve as a scalable, publicly verifiable complementary diagnostic for characterizing demand modulation and informing demand-side planning and policy.