The Rising Cost of Conservation

[6souls]

For a while now there has been an effort to conserve the use of utilities (water, electricity, etc.), but it would seem that this is harming the utilities companies as they are now passing along the loss of revenue onto the customers to recoup their losses. Here in Minnesota, there was a 9 percent rate hike (+$8 average) for electricity. Here is an article released this week explaining it.

When you went to pay your power bill you might have noticed that Xcel Energy customers in Minneapolis are now paying 9 percent more for electricity as of January 1, 2013.

According to a press release from Xcel Energy in November of 2012 and a December 2012 Star Tribune Article, starting January 1, 2013 a typical residential customer will pay about $8 more per month due to the Xcel’s rate increase.

In the December 13, 2012 Star Tribune Article, “Xcel says the increase is needed to recoup investments in its two nuclear power plants, counter a drop in electric sales and pay for other power plant and transmission upgrades as well as higher property taxes.”

Minneapolis Energy Options (MEO) sat down with WCCO today to discuss the Xcel rate case and why Minneapolis residents shouldn’t be paying more to use less energy. Xcel stated that it needed to recoup the profits to counter a drop in electric sales due to consumers using less. MEO thinks residents should get rewarded for using less energy not have to pay more.

http://minneapolisenergyoptions.org/...night-on-wcco/
http://www.xcelenergy.com/About_Us/E..._rate_increase
http://www.startribune.com/business/...1.html?refer=y
http://minnesota.cbslocal.com/video?...clipId=8351697

The hike probably would have gone over a little better had they not said that they were punishing consumers for using less energy, which is something that they preach online and is included with every monthly bill.

There is a wind farm in southern Minnesota that was shut down because it was giving too much power back to the grid. The guy who had owned the farm decided to make another farm a few miles away as a "fuck you" to Xcel.

While doing research for more examples, I see Nevada's NV Energy is also looking to punish their customers for conserving power.

Despite higher-than-expected summer revenue, NV Energy is seeking the OK for a $9.8 million surcharge to make up for revenue lost as the result of conservation measures taken by its customers.

The state Bureau of Consumer Protection is opposing the request before the state Public Utilities Commission.

Dan Jacobsen, technical staff manager for the bureau, said it is inappropriate and unreasonable for NV Energy to seek a surcharge, “particularly while customers are struggling to pay higher-than-normal summer electricity bills.”

It was hotter than normal this spring and summer, prompting customers to spend more to keep their air conditioners running.

A 2009 law allows utilities to raise rates to offset the loss of revenue due to conservations measures by customers. Utilities argued they have fixed operating costs to cover.

Jacobsen, in prefiled testimony to the PUC, said the power company has already made up for any lost sales from conservation efforts by the higher-than-expected revenues collected during the hot summer months through August.

But Patricia Franklin, NV Energy manager of revenue requirements, said the utilities commission rejected those same arguments by Jacobsen in a 2010 case.

“Once again, BCP (Bureau of Consumer Protection) is trying to link sales growth to lost revenue recovery. As the commission found 18 months ago, this is contrary to the statute and rejected the proposal,” Franklin said.

Stopping NV Energy from collecting the surcharge would be a disincentive for the company to promote energy efficiency programs, she said.

http://www.lasvegassun.com/news/2012...make-conserva/

Is there anyone else also experiencing this issue? Why the hell should we use less power by using energy efficient electronics or switching to CFL/LED light bulbs if they're just going to charge us for the difference in the end anyways?

[Churchill]

Arizona is pretty bad as well. SRP (Salt River Project Hydro) is cheap as fuck, but most of the Greater Phoenix area is serviced by Nuclear and it's expensive as fuck (but only during the daytime, so people are supposed to let their houses turn into ovens during the summer in order to save money, which almost no one does)

[Blubbartron]

Gotta love capitalism. Granted, if you're gonna get fucked either way, you might as well at least *try* to do something that's not destroying the environment. Less energy used means the energy can come from cleaner sources, yadda yadda.

[Ragnus]

But if we convert over to power sources like wind energy we'll use up all of the Earth's wind!

[kuronosan]

They do the same thing in Kansas and Missouri. This isn't something limited to any single group of states. It's sort of like credit card companies rewarding responsible consumers with higher APRs on their accounts instead of lower.

It's basically them going "Well we wanted you to conserve but instead of rewarding you for being responsible we're going to charge you more money".

[Waraji]

Thanks Obama.

[hey]

Utilities argued they have fixed operating costs to cover.

What's the problem? Using less power doesn't really affect their costs much, so if everyone uses less power, it costs them relatively more, and thus the price goes up.

[Callisto]

The point being why go to extra lengths to conserve if you're not realizing any benefits for it.

[Waraji]

This would only give me incentive to jump off the grid and produce my own energy. Fire up the old cold fusion generator running on nickel dust.

[kuronosan]

They'd find a way to make you pay for it. You see, people having self-sustenance makes them no money.

[Callisto]

I guess this is really like the IPass toll system here, if you get on track with the new system(conservation) your costs stay the same so you don't actually gain anything, but if you don't you get reamed for it since you get the new % hike on top of your still-high consumption.

[ronin sparthos]

The point being why go to extra lengths to conserve if you're not realizing any benefits for it.

That being the point. Wouldnt want Americans to stop engorging themselves physically and mentally.

[Restrat]

you still save money by conserving now, on an individual level- with higher prices you're saving even more than if you were using the same amount!

[Jaybar]

The cost should be seen as an investment for a cleaner environment. I don't like how the utility companies are passing the idea of conservation being wasteful because of $$$. Pathetic.

Like, if the demand for cleaner energy sources is high, then we should invest in companies to go that route (by paying higher bills in the short-term) so that they can build a better infrastructure so that in the long-term we pay less.

[BaneTheBrawler]

herp derp free market derpaderp

[Melena]

Cali it's the same thing. OMG conserve water we are in a drought. Six months later, oh shit, you conserved too much you naughty humans, we now have to charge more to recoup our lost profits.

[Seraph]

Perverse incentives at their finest, assuming the goal was to actually save resources and not just get paid more per unit of resource all along.

[zoobernut]

I live in Nevada and the really shitty part of this whole thing is that the power companies are the ones telling us to conserve energy. NV Energy runs adds constantly on TV telling people to go to their website to learn how to use less power or they have bulb buyback days where they will sell you super cheap low energy bulbs if you bring in old bulbs. That has to be illegal in some way to go at such great lengths to get your customers to do something and then punish them for it.

[Lucavi]

^ That's like saying capitalism is illegal. Here's a tip:

Its not, and this isn't either, because its profitable.

[Callisto]

The thing here is that capitalism implies a market. Most residents don't exactly have options when it comes to electrical service as they're legalized monopolies. You follow the instructions they give you, then they pass a massive markup down due to you following their instructions, and the customer gets no choice really.