Whatever happened to Reddy Kilowatt? I have indelible childhood memories of the friendly power company mascot extolling the virtues of electric power on radio and television. Reddy’s purpose was to encourage all and sundry to purchase more of the reliable, inexpensive electricity being produced down at the power plant: Capitalism 101.
That was before green regulatory agencies inverted the incentives for success. In 2007, Pacific Gas & Electric began saturating the Northern California airwaves with “Flex Your Power” ads featuring recycled Gore-isms such as “Global warming is a choice,” and concluding with a plea for listeners to save the earth by refraining from buying anything sold by PG&E.
Incidentally, PG&E’s marginal price for residential electricity, at 49.78 cents per kilowatt-hour, is nearly five times the national average of 10.54 cents per kilowatt-hour.
Why would a private business mount a publicity campaign saying, essentially, “If you care about humanity, if you value the planet, if you want your children to thrive, please stop using our products”? A glance at the PG&E web site provides the answer:
Does PG&E earn more money by selling more electricity?
No. PG&E collects a fixed level of revenue, determined by independent regulators, regardless of actual energy sales. If energy sales are higher than the approved level, the excess revenues go back to customers. If sales are lower than the approved level, the shortfall is recovered the next year through a rate adjustment. PG&E actually earns incentives by achieving energy efficiency targets that may reduce sales. This system has helped California keep per capita energy use flat over the past 30 years, while the rest of the nation has seen a 50 percent increase.
Under the “fixed level of revenue” regulatory scheme, the only way for PG&E to get ahead is to do less: less output, less customer service, less of everything at ever-higher prices: Socialism 101.
It’s hardly a surprise that California’s manufacturing businesses, which disproportionately depend on affordable electricity, are relocating elsewhere. As for Reddy Kilowatt, all I have is a forwarding address -- in Shanghai.