Why is it that energy companies charge less for using more instead of less for using less ?

Question

Our energy company charges with two tarrifs, but surely , to help the environment , and do our bit, we should be paying less if we try to be frugal with our heating .

Answer 1

The more you use the less it costs per unit to get it to you.

Answer 2

Corporate Welfare.....The rich get richer.....the poor pay for the rich, always has been, always will be.

Answer 3

the less you use the more it will cost. say everybody used 50% less then the turn over of the company would drop by 50% = unhappy share holders, all you do by using less is boost profits and cost people their jobs.

Answer 4

energy companies are interested in selling energy and making profits, the costs they attribute to each user are made of a fixed cost per customer, and additional marginal costs per unit of energy, naturally the more you use the less it costs them per additional unit, and that is how they price their product.

Answer 5

Very good question. Here in Mexico it is the opposite. If you have a small house and use little, it is very cheap. If you use more, you pay much more per KW HR. It is a built in incentive to conserve.

I think it is a good system. Also, here a business pays a higher rate than a persons house.

Answer 6

You are quite right.  It would make sense for the environment if those who are frugal paid less per unit than those who are wasteful.  One of the previous answers (from Gaby) shows that is what happens in Mexico.  But unfortunately most energy companies are privately owned and have little interest in protecting the environment, unless forced to do so by government.

Governments can either nationalise the energy companies and introduce sustainable policies or they can force sustainable policies on them by regulation.  Unfortunately governments are worried that they may lose support by doing these things so they need encouragement from the general public.

My advice is to set an example of frugality that others will follow and which will help convince governments that sustainable policies could attract votes.  This leads me to comment on the answer from prsctboy.  This gives sensible advice on finding the cheapest tariff but reveals a lack of appreciation of your environmental motivation.  In particular I fail to understand why prsctboy should need to use power to dry clothes in Arizona.  I live in the UK where rainfall is more frequent but I still manage to dry my clothes on a clothes line (or indoor airer when necessary).  Not only is this cheaper and more environmentally friendly but it produces a fresher feel to my clothes, without the need for chemical treatments added in the tumble drier.

Best wishes.

Answer 7

it is not proper

Answer 8

In a perfect world yes you would be right - but unfortunately to the energy company its just business and money - there are competitors out there and they must offer their bigger clients a discount or the client or company concerned will go elsewhere without hesitation - wheras the little guy the home owner or renter doesnt really look into the costs so much they just join with which ever energy company is the major in the area and just pay the price - yes they may complain but if they want power or gas they have to pay - it has nothing to do with being green unfortunately its just business

Answer 9

So that they make more money and profits as i am not sure that they care for the environment as much  as money.[i hope i phrased this the right way]

Answer 10

I live in Arizona and requested to be put on the Time advantage rate, Which the Electric Company will not tell people , exists. Simply put. there is a Standard rate, say.8 per kwh and the consumer pays a straight rate of .8 per kwh.

Then the time advantage rate,(which the utility company WILL try to talk you out of unless you are a LARGE FAMILY). I insisted, this rate charges .8perkwh on peak times 9 am till 9 pm. then .4 per kwh between 9 pm and 9 am.  A simple adjustment to the way i do laundry  and use my dishwasher and the cost come down quickly. Start the dishwasher before bed, and  dry clothes in the morning or before bed.