🚀 go-pugleaf

unidextr@msn.com wrote:
>
>>I think it's pretty safe to say higher rates do promote more efficient
>>use.  Most people will reduce consumption by doing without (e.g.,
>>adjusting the thermostat or turning off unnecessary lights) or by
>>installing more energy efficient appliances.  If rates are low,
>>there's little economic incentive to do either.
>
>And when use goes down they will demand higher rates to compensate for
>the lost profits caused by the lower use!  I seen it happen with
>another public utility, where conservation was so good that the
>utility demanded (and got) a significant rate increase to be able to
>pay share holders dividends! (and management salaries and bonuses!).

  It is different when the local utilities are buying energy on the spot
market due to inability to generate what they have to sell.  The problem
is that some utilities are exempt from deregulation on the retail level
where the wholesale market is more deregulated.
  Look to Pennsylvania for results of retail rate regulation being better
at being as deregulated as wholesale rate deregulation.  There you have
better price competition and nobody being forced to sell retail at prices
below the wholesale market.  Although Philadelphia still pays rates a bit
more than what California was accustomed to a few years back, rates in
Philadelphia and elsewhere in Pennsylvania have mostly dropped and
definitely largely lagged inflation and hardly anyone expects a crisis
anytime soon.

 - Don Klipstein (don@misty.com)