Academic Says Real-Time Pricing Creates Cross-Subsidies

By Published On: December 17, 2010

Under investor-owned utilities’ current rate structure, those who consume large amounts of energy when it is hot and demand is high--and real-time prices are highest--are subsidized by other ratepayers, Severin Borenstein, director, University of California at Berkeley’s Haas Business School Energy Institute, said Dec. 9. Much of the cross-subsidy is from coastal communities to Central Valley homeowners who live in far-warmer regions. Speaking to the California Energy Commission, Borenstein also objected to installing different meters and charging different rates for different energy uses, such as charging electric vehicles. “It is selling the same product for different prices,” he said.

Share this story

Not a member yet?

Subscribe Now