$10 compensation a money merry-go-round

12 August 2009

$10 compensation a money merry-go-round

Offering a mandatory minimum payment to all consumers of $10 a week during water conservation campaigns in a dry winter is the wrong approach. This kind of measure will not be effective in encouraging generators and retailers to better manage the risk of dry years – $10 won’t make it rain. Ultimately electricity companies will incur huge costs, and these will no doubt be recovered from consumers. Essentially customers will receive a credit with one hand and pay out with the other - a money merry-go-round.

There is a simple answer - use less electricity. Additional effort should go into reducing demand from the industrial, commercial and residential sectors. Only by encouraging water conservation will we see any real benefits.

A significant decrease in consumption can be achieved through well-targeted electricity efficiency schemes. Many campaigns are already underway in one form or another, including those promoting the purchase of efficient household appliances and better home insulation.

Consumers will inevitably respond to electricity charges, so more use should be made of time-of-use prices, smart meters, and energy smart appliances.

Educating customers about the use of ripple control for water heating, and the associated reduction in electricity bills would also reduce peak electricity usage. Ripple control systems are used to communicate to major customers during periods of high electricity demand and could play a far greater role in a dry winter.

Ten dollars may on the face of it, be an appealing way to reward frugal consumers for reducing their demand in a dry year, but in the end the customer still pays.

ENDS

Notes
1. The Institution of Professional Engineers New Zealand (IPENZ) is the professional body which represents professional engineers from all disciplines in New Zealand. The terms "engineering profession" and "professional engineer/engineering" are used by the Institution in the broadest possible way, to include all those who use a systematic process of analysis, design/synthesis and implementation, strive to operate in a responsible way, are governed by a code of ethics set by their peers, and engage in continuing professional development to maintain the currency of their competence

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