Stelzer on rate reform: if you don't, the Government will
It is becoming difficult to support utilities in rate cases, warns Irwin Stelzer, president of National Economic Research Associates. Stelzer says he is often used by utilities as a witness in their requests for higher rates, but he is finding it hard to argue in their favor. The problem, he says, is the ''uneconomic'' pricing policy of the utility industry. Instead of favoring different rate structures, utility managers tend to favor direct load management and appeals to customers as a method of reducing peak demand. He blasted both of these tactics. Large industrial consumers also like direct load management because they think it is better than rate reform. The author sees no advantage in attempts to flatten load curve, because he maintains utilities have the equipment and technical know-how to satisfy any sort of demand curve. He challenged managers and executives at the meeting of the Electric Council of New England to rethink their position on rate reform because ''if utilities don't reform rates on their own, the Federal Government is going to do it.'' The answer to the problem, in Stelzer's opinion, is to junk the existing embedded-cost pricing method and switch to marginal cost pricing. ''If the cost varies by time of use, let the customers know by letting the price vary by time of use, then let the customer decide what to do. The economically appropriate load shape will follow,'' he says. (MCW)
- OSTI ID:
- 7095302
- Journal Information:
- Electr. Light Power (Boston); (United States), Journal Name: Electr. Light Power (Boston); (United States) Vol. 55:1; ISSN ELLPA
- Country of Publication:
- United States
- Language:
- English
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296000* -- Energy Planning & Policy-- Electric Power
CHARGES
CONSUMPTION RATES
ELECTRIC POWER
ENERGY CONSUMPTION
GOVERNMENT POLICIES
LOAD MANAGEMENT
MANAGEMENT
POWER
PUBLIC UTILITIES
REGULATIONS
VARIATIONS