New Idea For Power Companies

By: Jill Cordes
By: Jill Cordes

Most power companies make money based on how much energy they sell. So what incentive do they have to get people to use less energy?

An idea already established in a few states and gaining support nationally is called decoupling. Simply put, decoupling separates profits from sales: electric utilities would generate their revenues based on the services they provide rather than just how much electricity they sell. Decoupling is a way to cut electricity use and the CO2 emissions that contribute to climate change. And by using less electricity, it's a way for consumers to save money on their utility bills.

Some industry and consumer groups oppose decoupling, saying it's not an effective way to promote energy efficiency and could lead to higher rates if not implemented well.

However, the stimulus bill signed into law in February can potentially help states-through grants-to make it profitable for electric companies to help consumers save energy. And that translates to less money out of your pocket spent on electricity. With federal financial motivation, more will likely follow.


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