Prohibiting Energy Rates that Disincentivize Conservation (Statewide proposal)

States should consider adopting legislation that prohibits private utility companies, electricity membership cooperatives, and municipal energy providers from offering energy rates that disincentivize conservation.

For example, Georgia Power, which offers electricity service to much of Georgia, offers a Flat Bill rate plan that provides no incentive for households to conserve energy.

Under the Flat Bill plan, consumers can pay the same amount every month for their energy usage.  The flat amount consumers pay under this plan is based on their previous usage plus an additional amount calculated by Georgia Power.

According to Georgia Power: “You will not receive any refund or credit for amounts paid under the FlatBill rate plan (1) if the amount of electricity actually used during the plan results in a billing amount under the current residential rate plan that is less than the amount for which you have been billed…”

In other words, at the end of the twelve months, if you use less energy than Georgia Power had predicted, you do not receive a refund.

Therefore, there is no incentive to conserve energy under such a rate plan, and such plans should be prohibited by state law and by state public service commissions.

Flat bill programs should always offer a refund at the end of the program, to customers who reduce their energy usage over the previous year, in order to incentivize energy conservation.

In addition to increasing the renewable proportion of each state’s energy portfolio, states must also do all they can to reduce energy consumption where possible.

This is particularly the case as developing parts of the world increase their use of energy and their standard of living.

There are still many easy reductions to be made in energy consumption in people’s homes in the U.S.

Many homeowners or residential lessors and tenants would be amazed at what energy savings can be achieved with a home energy audit and through the application of insulation to their roofs, ceilings, and windows.