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The American Energy Consumer







If the poor and low and middle income groups are able to afford more, and the well off would reduce their expanding rate of use, the total growth in household energy consumption could moderate. Revenues would not fall while utilities could serve their customers more equitably with needed energy, and the environmental threat of more power plants would diminish. The end result would be economic as well as social improvement.

    Expand the consumer concerns of the Federal Power Commission and state utility commissions. These responsibilities should include rate reform as well as other consumer concerns. Such a change in the scope of responsibility could improve substantially the energy consumers' economic situation and their environment. Some of the steps strongly recommended under an expanded mandate are as follows:

    • Prohibit promotional practices and other types of advertising by public utilities. This would reduce cost induced price increases by eliminating artificial incentives to expand consumption, especially by the most well off. Slowing the growth in energy consumption will reduce the need for new capacity—a major reason for rate increases.

    • Make it obligatory to include consumer representatives—some of whom should be women and minorities—on utility regulatory commissions and the Federal Power Commission. This is in line with civil rights legislation. It would bring better awareness of consumer needs and more equitable decisions that affect the community at large, as well as give a voice to those who now lack one. Restructured commissions also would be likely to curb practices that fall hard on particular consumers. Some special consumer concerns have to do with policies of turning off the gas or electricity because of nonpayment of bills, requiring advance deposits for installation, choosing the location of energy facilities, and moratoria that prevent utility lines from being extended to places where housing may be urgently needed. Consumers would be especially interested in the matter of how to save energy by having the gas furnace pilot light turned off in the summer. Much gas could be saved if this were done with no direct charge, so that everyone would do it. The service would be a legitimate cost in computing the price of natural gas.

    • Forbid persons in or from the energy industry or associated industries from membership on state regulatory commissions or from employment in the Federal Energy Administration. Conflict of interest should be a key criterion in screening commission members or employees who may be in a position to affect energy policy.

      Footnotes

      Footnote :

      e The problem of declining average revenues with increasing average costs as high use customers increase their consumption (revenue erosion) was discussed in Chapter Five.

      Footnote :

      f Two conflict of interest cases reported by the General Accounting Office concern the Federal Energy Administration and are described in The Washington Post, "2d Conflict of Interest Seen by GAO in U.S. Energy Office," June 29, 1974, by Morton Mintz.