Utility Pricing Question
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Utility Pricing Question
I wondered why utility companies (electric, water, and gas) always have lower rates for the more of their product you use. It seems that the price should increase to promote conservation. I realize that not all utilities are they way, but the ones that we have, and the ones I have seen use this practice. Just wondered why.
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Well here where I live, they have a minimum billing for water consumption.
It is 10 m3 per month plus all the other charges to get it to me and the taxes as well.
Volume Price is $1.25 / M3
I use no more than 7 m3 over 2 months but get billed for 20 m3
That is not getting it cheaper for using more
It is 10 m3 per month plus all the other charges to get it to me and the taxes as well.
Volume Price is $1.25 / M3
I use no more than 7 m3 over 2 months but get billed for 20 m3
That is not getting it cheaper for using more
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Joined: Jan 2005
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From: Seattle
Why???
Because they are in the business to make MONEY, that's why.
Think about it, they got a product to sell. Why on earth would they want to discourage the sale of that product? If you think the CEO's and shareholders of Utility companies (specifically private ones) are laying awake at night worrying about global warming, deforestation, etc. etc., you're dreaming.
Because they are in the business to make MONEY, that's why.
Think about it, they got a product to sell. Why on earth would they want to discourage the sale of that product? If you think the CEO's and shareholders of Utility companies (specifically private ones) are laying awake at night worrying about global warming, deforestation, etc. etc., you're dreaming.
Last edited by RocketScience; Nov 25, 2006 at 03:30 PM.
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Originally Posted by jake00
I sell woodflooring. The guy who wants a truckload gets a better price than the guy who wants 1 bundle.
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From: Sunny tourist infested FL
Florida Power and Light rates are the "less you use the better the price". The rate for power usage of less than 750kwh is lower than usage more than 750kwh. Once you hit 750kwh of usage and above, the rate you pay for that electricity increases. So for us, the less you use the less you pay. The 2 tier plan penalizes you if you use more the 750kwh with higher rates.
For large consumers, like water treatment plants, if you turn on a high usage pump for 1 minute, and then turn it off, during a peak time, you get charged a higher rate for for all electric power used for that time period.
It's one way FPL tries to keep large users from adding to peak power consumption.
We also have a "load shed" program. That's were FPL will automatically starts the treatment plant generators and removes the plant from the power grid. It helps FPL deal with high demand, like in august when it's 100 degrees and everyone is running their A/C.
For large consumers, like water treatment plants, if you turn on a high usage pump for 1 minute, and then turn it off, during a peak time, you get charged a higher rate for for all electric power used for that time period.
It's one way FPL tries to keep large users from adding to peak power consumption.
We also have a "load shed" program. That's were FPL will automatically starts the treatment plant generators and removes the plant from the power grid. It helps FPL deal with high demand, like in august when it's 100 degrees and everyone is running their A/C.
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