Dems Punish Green Consumers To Give To Pet Utilities

Hidden in an obscure congressional amendment is a big gift to pet Democratic interest groups - and a big betrayal of the Democrats' supposed green principles.

In recent years, as energy prices skyrocketed, consumers reacted by conserving. They switched to high-efficiency light bulbs, lowered thermostats, and invested in more efficient refrigerators and air conditioners.

This is good news for the efficiency of the U.S. economy. It's bad news for the bottom lines of electric utilities who make money by selling more power, not less.

House Energy and Commerce Chairman Henry Waxman (D-Calif.) has a different idea. It goes by the technical name, "revenue decoupling." What it does is not technical at all. It allows utilities to protect themselves against declining consumer demand by charging higher and higher prices. As consumers cut their power usage, utility companies will benefit from the ability to raise their rates to maintain revenue levels. The consumer loses the incentive to be a good conservationist while the power company reaps the benefit of reward.

This approach removes all incentives to cut down on power use. And Republicans are not the only people to have noticed.

The people who regulate the utilities at the state level are baffled. The National Association of Regulatory Utility Commissioners wrote to the minority and majority leaders of both chambers of Congress, calling attention to the damning nature of the amendment, saying the ratemaking preconditions "will risk confusion, and could unnecessarily delay effective energy conservation efforts and the delivery of stimulus funding into the economy."

Businesses who use electricity are angry too. In correspondence to Energy and Commerce Chairman Waxman and ranking member Joe Barton (R-Texas) acquired by NewMajority, the American Forest & Paper Association spoke out against the proposed legislation.

The AF&PA warned the ramifications of the bill's passage "will diminish manufacturers' incentives to improve their energy efficiency, and raise their overall energy costs."

So far, these protests have achieved nothing. Barton offered a provision that would strike the utility-benefiting language, only to have that provision struck down on a party-line vote, 33-20.

Waxman's amendment was designed after his home state's energy plan, which uses a ratemaking scale to reward utilities when consumers conserve energy.

Bad as it is, the Waxman measure does one service: It provides early indication of the gifts and giveaways that are already being tucked into the stimulus package working its way through Congress to President Obama's desk.