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The American Energy Consumer







Table 5-30.Index of Price of Electricity and Natural Gas by Size and Type of User, 1952, 1962, 1972 (Large volume users = 100)
Type of user 1952 1962 1972
Electricity
Commercial & industrial
Large light and power 100 100 100
Small light and power 251 247 204
Residential 274 251 210
Natural gas
Industrial 100 100 100
Commercial 308 227 201
Residential 405 289 264
Source: Prepared by the Washington Center for Metropolitan Studies from Edison Electric Institute, Statistical Yearbook of the Electric Utility Industry, For 1972, New York, November 1973, Table 45S, p. 53. American Gas Association. 1972 Gas Facts: A Statistical Record of the Gas Utility Industry in 1972. Arlington, Va., 1973, Tables 64 and 79, pp. 78 and 98.


In general, new cost-justified structures that reflect the costs of providing energy should replace the promotional block type of rate structures now in use. With electricity, such a pricing system also needs to be geared to peak period use, as is now the case in France. Such a pricing system would eliminate or at least greatly modify the present rate system, which causes the poor to pay more per unit of energy than others. Such a reformed rate system would also slow the growth in residential consumption generally, thereby easing possible energy shortages and the air pollution created by the fuel additional electric generating plants would burn. By slowing the rate at which plant must be expanded, such a reformed rate system would give utilities opportunities to find ways of eliminating the pollutants given off into the air by their existing plants.

Footnotes
Footnote :

a 1950.

Advertising

With air pollution and energy shortages as immediate concerns, the need for advertising by energy companies is being challenged. The head of the Federal Energy Administration recently sent a stinging letter to the presidents of twenty major oil companies calling on them to stop the "hard-sell tactics in gasoline."

Increased prices rather than decreased profits pay for most energy advertising. With utility advertising, there is little question that the cost is paid by the consumer, because promotional activities are usually considered part of the operating expenses by the utility regulatory commissions. Thus utilities are allowed to pass these costs on directly in their rates. Some regulatory