The Paradox of Inclining Block Rates
What goes up doesn’t always come down.
What goes up doesn’t always come down.
Alaskan crisis demonstrates pocketbook power.
A series of avalanches thundered down the sides of coastal mountains near Juneau, Alaska, early in the morning on April 16. No people were hurt—not directly. But the avalanches took out several transmission towers that carried electricity from the Snettisham hydroelectric dam, cutting Juneau off from its primary source of power. The resulting crisis turned into an instructive experiment for Alaska Electric Light & Power Co.—Juneau’s privately held utility—as well as the industry in general.
Is electricity price-elastic enough for rate designs to matter?
Contrary to conventional wisdom, electricity demand isn’t immune to price elasticity, and rate designs can encourage conservation. In particular, inclining block rates coupled with dynamic pricing can cut electric use by as much as 20 percent.
Gas utilities and state commissions must work together to help preserve rates of return, encourage conservation, and lower customers’ bills.
Why does FERC want to limit pipeline discounts?
How do customers react to hourly prices?
As California embarks on a Statewide Pricing Pilot (SPP) for residential and small commercial (200 kW) customers, policymakers and participants in the proceedings are asking several questions:
How do customers react to hourly prices?
As California embarks on a Statewide Pricing Pilot (SPP) for residential and small commercial (200 kW) customers, policymakers and participants in the proceedings are asking several questions:
While the prices play catch up, utilities and regulators should start looking for ways to mitigate costs.
Water utility rate increases have outpaced those of other utilities. In fact, water rate increases since 1984 %n1%n have surpassed the overall rate of inflation. Yet among utility services, water remains a real bargain; consumers spend less on water than on any other utility.
By unbundling usage from access, utilities can maximize contribution to margin and yet still retain load.
With deregulation and industry restructuring, energy utilities face price competition from marketers, brokers, independent producers and even other utilities. To succeed in this environment, utilities will need to develop innovative pricing strategies that better meet customer needs and respond more effectively to competition. The common response by utilities to competition calls for price discounting to retain "at risk"
customers by meeting the competition head-on.
Hardly at all. In fact, they do little more than reapportion income (em a task that lies outside the FCC's mandate.
The Federal-State Joint Board on Universal Service recently proposed to expand subsidy programs for Lifeline telephone service. Under the Telecommunications Act of 1996, the Joint Board seeks to add more low-income households to the telephone network.
Will such a strategy work? Our recent findings suggest not. They indicate that simple continuance of such programs, much less expansion, is a highly questionable proposition.