Jason Barton

Professional Information and Energy News

Energy usage in the 21st century

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The pricing system discussed here, referred to by economists as reverse block pricing, is basically the opposite of volume discounts. Those homes and businesses that consume the most power pay a higher price per unit of electricity. In using less electricity, we then have not only the savings earned from purchasing less electricity, we are also motivated by paying less for each unit purchased.

As the editorial points out, this should not be seen as a government effort at social engineering, but as a logical mechanism to induce greater energy efficiency. The policy concerns expressed in the article are certainly apt, and ensuring that data gathered on energy use are not shared or used inappropriately is an important consideration as policies like these move forward and, hopefully, become more common.

Posted: 03/07/2010 01:00:00 AM MST

Editorial
By allowing Xcel Energy to charge a premium for higher electricity usage, the PUC is embracing modern realities.

By The Denver Post

By approving Xcel’s new two-tiered rate structure, the Colorado Public Utilities Commission moved closer to embracing more sophisticated ways of measuring and pricing electricity so that those who use the most pay a premium.

Ideally, the new structure will use financial incentives to curb consumption during peak use, and won’t be a push toward social engineering. Rather, it is an acknowledgment of the emerging economics of power generation.

Read the entire artilce here.