Thursday, March 4, 2010

Saving on Your Utilities

One of the great myths of the energy debate is "If you reduce your energy consumption you will save money." You can reduce your energy consumption by turning appliances off at the wall, changing to energy efficient light bulbs and buying energy efficient appliances. If you are trying to save energy - great! If you are trying to save money - wrong! Think of it from a logical point of view. The energy companies are in the business of making money, and lots of it. When we were using energy like there was no tomorrow they were making record profits. When you reduce your energy consumption they lose money. The only way they can continue to make big profits is to charge you more for the energy you use. Expect that as energy consumption comes down, the price per unit of energy will go up.

The same will happen across other utilities such as water and gas. It is already happening with water. We learned to use less when there were restrictions in place. Now that the restrictions are gone we are still being frugal with our water. The water companies still want their profits (got to keep the shareholders happy) so they have to increase the cost of the water, or recover the cost elsewhere. In some places the water bill can be over $120 before you even turn on the tap.

All the environmental arguments in the world will not be as effective at reducing energy consumption as the hit to their hip pocket. What is discouraging to both climate skeptics and environmentalists is the penalty that people pay for reducing their energy consumption. By the way, why do we need two new power stations if everybody is reducing consumption? The power producers and the regulators (one and the same) have to justify the the increased cost....so why not justify it by building power stations we don't need. They would be far better spending that money by putting solar power on every home, office block and school in the state.

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