Declining-block rates don't subsidize large users

Journal Article · Mon Jul 18 04:00:00 EDT 1977 · Energy User News; (United States)

OSTI ID:7084861

Cleary, J M

President Carter's view of declining-block electric power rates is criticized and the case presented for a cost-of-service base for setting rates. Studies have demonstrated that, 80 percent of the time, utilities make more profit from industrial consumers paying rates above cost of service, although the highest rate of return is from the commercial users. A restructuring is desirable, but should take the direction of off-peak incentives and load-management techniques. The high rate for small residential users is due, not to declining-block rates, but because they are the most costly to service and are, therefore, subsidized by industrial users. Those who are unfamiliar with utility costs do not readily understand that declining-block rates are designed so that large customers are overcharged and small users undercharged. True cost computation will require meters that can measure cost of service by recording demand and consumption, which vary between utilities. The Administration's conservation proposals are felt to require the greatest commitment from industry by not asking for any significant compromise of environmental standards. (DCK)

• Research Organization: Airco Inc., Montvale, NJ
• OSTI ID: 7084861
• Journal Information: Energy User News; (United States), Journal Name: Energy User News; (United States) Vol. 2:28; ISSN EUSND
• Country of Publication: United States
• Language: English

Related Subjects

20 FOSSIL-FUELED POWER PLANTS
200106 -- Fossil-Fueled Power Plants-- Economics
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
296000* -- Energy Planning & Policy-- Electric Power
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320300 -- Energy Conservation
Consumption
& Utilization-- Industrial & Agricultural Processes
CHARGES
COMMERCIAL SECTOR
COST
ECONOMIC IMPACT
ECONOMIC POLICY
ECONOMICS
ELECTRIC POWER
ENERGY CONSERVATION
ENERGY CONSUMPTION
ENERGY DEMAND
ENERGY POLICY
ENVIRONMENTAL IMPACTS
GOVERNMENT POLICIES
INDUSTRY
INVESTMENT
LOAD MANAGEMENT
MANAGEMENT
MEASURING INSTRUMENTS
NATIONAL ENERGY PLAN
POWER
PUBLIC OPINION
PUBLIC RELATIONS
PUBLIC UTILITIES
RESIDENTIAL SECTOR