Energy prices and public policy

Book · Fri Jan 01 04:00:00 EST 1982

OSTI ID:6835561

An unusual collaboration between an organization of business executives and a group of conservationists has produced an energy policy statement that calls for continuing the recent shifts toward market-determined energy prices so that production, consumption, and conservation decisions can reflect real costs. Under such a market-oriented system, the poor should receive adequate welfare increases to compensate for the estimated $3-7 billion drop in their annual real income caused by rising energy prices over the past 8 years. Moreover, the government should step up efforts to upgrade the energy efficiency of the homes of low-income consumers. Although energy price deregulation could expose the US economy to more inflationary pressures in the short term, the alternative of maintaining controls would have even worse economic effects by weakening incentives to conserve and produce. Instead of being averaged and based on historical, embedded costs, electricity prices should represent the replacement costs of electricity for all customers; deregulation of electric utilities would encourage power generation from diverse sources. Faster decontrol of natural gas prices could boost gas production and would certainly reward greater conservation. Full and immediate deregulation of all categories of gas will avoid a sharp price hike in 1985 and will benefit the nation by helping to order (or reorder) investment decision with regard to new supply technologies or transmission facilities. Gas utility rates should reflect gas's economic value to consumers, and restrictions on the uses of gas should be scrapped. If a severe oil emergency arises, prices should be the essential mechanism for allocating supply.

• OSTI ID: 6835561
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
03 NATURAL GAS
030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
Legislation
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294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
296000 -- Energy Planning & Policy-- Electric Power
BUILDINGS
DEREGULATION
ECONOMIC IMPACT
ECONOMIC POLICY
EFFICIENCY
ELECTRIC POWER
ELECTRIC UTILITIES
ENERGY CONSERVATION
ENERGY EFFICIENCY
ENERGY POLICY
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GAS UTILITIES
GASES
GOVERNMENT POLICIES
HOUSES
NATURAL GAS
NORTH AMERICA
PETROLEUM
POWER
PRICES
PUBLIC UTILITIES
RESIDENTIAL BUILDINGS
USA