We conduct a large-scale randomised experiment with two electricity distribution companies in the state of Bihar in India, to test the impact of a new power allocation rule on consumer payment rates and firm outcomes. We find small, positive effects of the assignment to the allocation rule on distribution companies’ revenue, but these effects are not statistically different from zero. In terms of firm outcomes, our estimates suggest that one hour of additional power supply increases electricity-using capital by INR 531 on average on a base of INR 1690, but does not affect non-electricity using capital – with notable differences between economic sectors. However, the low compliance with the new rule that we observe means that these estimates are only suggestive of a causal link between electricity supply and profits.
