Parker takes another run at electricity policy orthodoxy today in the National Post, this time attacking conservation programs. Parker keys in on one of the most foolish blind spots of the politically correct conservation advocates — the failure to count lost revenue as one of the costs of conservation. Two of the pillars of modern utility economics, Paul Joskow and Larry Ruff, shouted about this intellectual gap until they were hoarse.
One criticism from the cheap seats. The last paragraph discusses rate impacts. It might have been good to include a note to the effect that the HONI TX and THESL DX applications relate to only portions of the bill.
Good to point out that certain increases affect only a portion of the bill. This business is capital intensive and if one drills down on things and ferrets out true marginal costs for each element, the number would probably be well below a conservative value of 20% of total costs. So, if everyone were to decrease consumption 10% overnight and all costs and rates were simultaneously rebalanced, bills would go down by 2% (not 10%). That’s why CDM is a “kill or be killed” game. It’s also like outrunning a bear — make sure you run faster than the other guy.