As Conservation Cuts Electricity Use, Utilities Turn to Fees
Double-digit percentage increases for distribution, maintenance anger power consumers
Electric utilities across the country are trying to change the way they charge customers, shifting more of their fixed costs to monthly fees, raising the hackles of consumer watchdogs and conservation advocates.
Traditionally, charges for generating, transporting and maintaining the grid have been wrapped together into a monthly cost based on the amount of electricity consumers use each month. Some utilities also charge a basic service fee of $5 or so a month to cover the costs of reading meters and sending out bills.
Now, many utility companies are seeking to increase their monthly fees by double-digit percentages, raising them to $25 or more a month regardless of the amount of power consumers use. The utilities argue that the fees should cover a bigger proportion of the fixed costs of the electric grid, including maintenance and repairs.
“The [electricity] grid is becoming a more complex machine, and there needs to be an equitable sharing of its costs,” said Lisa Wood, a vice president of the Edison Foundation, the nonprofit arm of the utility industry’s trade group Electric Electric Institute. A typical American household pays $110 a month for electricity, she said; more than half goes to cover fixed costs.
Utilities in at least 24 states have requested higher fees, according to the Environmental Law & Policy Center in Chicago, which opposes some of these increases. If regulators allow the fee increases, “the result is that low-use customers pay more than in the past, and high-use customers pay less,” said Bradley Klein, a senior attorney for the group.
The problem for utilities is that many consumers are using less power these days, in large part because appliances and equipment are getting more energy efficient. Even though U.S. homes are getting bigger, energy consumption per square foot is going down, according to the federal Energy Information Administration. The rise of rooftop solar power in some parts of the country also is chipping away at power sales.