Lifeline rates: are they useful
California has recently taken two related actions concerning the pricing of electricity and natural gas that provide a convenient basis for discussing some of the theoretical and practical benefits that may emerge from a correctly designed ''lifeline rate'' structure. ''Lifeline rates'' are utility rate structures that hold constant or even lower the cost of an amount of electricity or gas determined to provide a minimum level of service to the average residential customer. Lifeline rates are attractive because they ease the financial burden on low- and middle-income consumers. Lifeline rates may also encourage energy conservation, because of the differences in energy use between large and small users. Every household needs a minimum amount of energy; even large increases in price may have little effect on energy consumption related to satisfying basic needs. But for larger residential users, who must bear part of the cost of lifeline rates for lower-usage customers, certain energy uses can be cut in response to price rises. It is concluded that lifeline rates are useful. However, even greater income and conservation impacts could be achieved through elimination of the customer or minimum billing charge and an increase in rates to higher-volume users. (MCW)
- OSTI ID:
- 7264069
- Journal Information:
- ECP Rep.; (United States), Journal Name: ECP Rep.; (United States) Vol. 4; ISSN ECPRD
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
290200 -- Energy Planning & Policy-- Economics & Sociology
294003 -- Energy Planning & Policy-- Natural Gas
296000* -- Energy Planning & Policy-- Electric Power
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320101 -- Energy Conservation
Consumption
& Utilization-- Residential Buildings-- (-1987)
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