The Odd Decouple
This is good news: according to NW Current, more and more utilities are becoming interested in "decoupling" -- which could be the single most cost-effective step I've heard of for encouraging conservation.
Here's how decoupling works. Utility rates are pretty tightly regulated: rate structures are dictated by utility commissions and the like. Traditionally, rate structures link a utility's profits to its sales: the more a utility sells, the greater its profits. But that creates a huge disincentive for conservation: if utilities get people to cut their consumption, they cut into their own earnings. In fact, a private utility that tries to get its customers to use gas more efficiently could actually run the risk of a shareholder lawsuit.
Under decoupling, though, utility rates are structured so that a utility's profit margins can rise when consumption falls. (In other words, a utility's earnings are "decoupled" from its gross sales.) This simple change can make it profitable for utilities to promote conservation. And as a result, decoupling aligns the utility's incentives with the incentives of its customers: everyone has an incentive to use energy more efficiently. Northwest Natural, an Oregon gas company, has been operating under a decoupled rate structure since 2002. One result -- it's shifted staff from marketing (trying to get people to buy more gas) to customer service. Whee!
Decoupling is one of those nifty little ideas with a huge potential payoff for a seemingly insignificant change. It doesn't take much to make decoupling a reality -- it relies on a simple alteration to the rules, rather than regulatory strictures or costly upgrades to technology. So it's nice to see it catching on.
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