March 09, 2011 05:34 PM UTC

Today's Main Event: Tiered Electric Rates

•  
• by: Colorado Pols

A bill up for debate in the House Transportation Committee today should prove quite interesting: House Bill 1271, sponsored by Republican Rep. Ray Scott and Democrat Sen. Cheri Jahn, would rescind the “tiered rate” structure for residential electricity billing in Colorado.

The rate tiers for electricity presently work like this: once an electricity customer exceeds 500 kilowatt-hours in a month between June and September, the price per kilowatt hour goes up. Under this plan, most residential customers actually pay less for electricity than they would otherwise, while about 30% of residential customers–typically large homes–pay a little more.

Well, HB-1271 rests on the presumption that this is not “fair,” and would require utilities to end the practice of tiered electric rates. Opponents estimate that this bill will increase electric bills for fully 70% of Colorado residential electric consumers, while the aforementioned 30% would see a decrease–again, those who consume less electricity would pay more per kilowatt if this legislation were to pass, while those who consume more would pay less.

Obviously there’s a policy goal, encouraging reduced electricity consumption, at the heart of the tiered rate structure. But it’s not like tiered rates are unusual–Utah, New Mexico, and Arizona, along with many other states, all have some form of it for the same purpose. It’s easier to disparage this policy goal in the wintertime, when there aren’t rolling blackouts due to the electrical grid maxing out while trying to keep Coloradans cool.

But there’s a simpler question for proponents of HB-1271 today: do they seriously want to hike electric rates on 70% of Colorado consumers–the ones who don’t live in big houses? That is not an achievement we would want to take home to our district afterwards.