Decoding Decoupling

Monday, February 09, 2009

Last week we reported that environmentalists and consumer advocates are at odds over a clean-energy provision in the House stimulus bill. Basically, it would make billions of dollars of grants available only to those states which "decouple" their utilities.

Decoupling guarantees utilities a certain level of revenue, regardless of how much product they sell. Environmentalists like decoupling because it removes the incentive to sell more gas or electric (and pollute more). Or, as the Wall Street Journal puts it in today's paper, "Less Demand, Same Great Revenue" - which is exactly what consumer advocates don't like. Why should ratepayers pay (a little bit) more for fewer kilowatts?

Yes, it's a little arcane, but decoupling could fundamentally change the way Americans buy electricity. And New York and New Jersey are on the vanguard of this movement - both states have decoupled some utilities (Con Ed gets it later this year).

The Senate stimulus package is out now...and the really interesting thing is that neither side has yet figured out whether the language is pro-decoupling or not. WNYC emailed with people on both sides of the issue and they can't figure it out. The takeway? This is not a very transparent piece of legislation.


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