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Forthcoming Report and Webinar Explain How Rate Design Proposals Have Customers “In a Fix”
Recently, there has been a sharp increase in the number of utilities proposing to increase mandatory monthly fixed charges for electricity. Utilities prefer fixed charges over usage charges, because fixed charges ensure a set amount of revenue each month, regardless of sales. However, higher fixed charges are an inequitable and inefficient means to address utility revenue concerns: they reduce customer control, disproportionately impact low-usage and low-income customers, dilute incentives for energy efficiency and distributed generation, and increase electric system costs.
In a forthcoming report sponsored by Consumers Union, Synapse discusses how fixed charges can harm customers and debunks common myths supporting fixed charges. The report also provides an overview of recent commission decisions on fixed charges—some responding to proposed increases of 100 percent or more–and offers alternative approaches that can help ensure utilities recoup sufficient revenue without unfairly affecting customers.
The report, Caught in a Fix: The Problem with Fixed Charges for Electricity, will be released on Tuesday, February 9. On Wednesday, February 10, Synapse and Consumers Union will host a free, public webinar on the findings. You can register for the webinar here.
Figure 1. Recent proposals and decisions regarding fixed charges