Let’s stop pretending that we’re paying for “energy” via our home power bills and understand that we’re mainly paying for infrastructure. Home electric bills have long been priced volumetrically (per kilowatt-hour, or unit of electric energy consumed), with only some small additional fixed charges like a meter charge and/or local fixed surcharges. Yet this legacy charge structure does not reflect the paydown on our grid’s sunk capital costs, nor does it do much to encourage customer load changes that reduce the need for more grid infrastructure. It also fails to allow homeowners and renters to fully capture the value of new residential technologies such as smart-home control systems, batteries and electric water heaters. Instead, we should allow all consumer classes — but most impactfully, the residential class — to opt into billing based on a three-part structure that relates to how their energy use actually impacts the system.
GTM 14th Aug 2020 read more »