Jason Barton

Professional Information and Energy News

Archive for the ‘Reverse Block Pricing’ tag

Energy usage in the 21st century

without comments

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.

Energy conservation leads to higher bills

without comments

This is a result of block pricing, which is similar to volume discounts. Reverse block pricing on the other hand, as the name suggests, charges higher prices per unit of energy for larger consumers. In places where it is used, whether for energy, water, or other precious resources, this system provides substantial incentive to reduce consumption.

January 24, 2010

PORTLAND, Maine—The Maine Public Utilities Commission is investigating a quirky problem for some commercial electricity customers: Their utility bills grow when they reduce consumption.

Commission Chairwoman Sharon Reishus says the situation is “inconsistent with Maine’s energy policy, which clearly encourages reduction of electricity use.”

The Portland Press Herald says the problem arises because of the way transmission and distribution rate classes are set up for commercial power customers.

Medium-sized companies may fall into the “small” company classification when their electricity use drops, putting them in a more costly rate category.

Read the entire article here.

Written by Jason

January 30th, 2010 at 12:19 pm