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Disincentives: ‘You’re killing us,’ Say the Three Ps

I see a lot of good in the economic benefits of sustainable products and policies – the Three Ps at their best. Unfortunately, some of the disincentives are just as compelling – as when water rates rise because the water department has to make up for lost revenue from declining volumes.

And now this, as reported by the January 18, 2010 Environmental Leader and the January 14, 2010 Vancouver Sun: “British Columbia Industrial Companies Waste Electricity for Lower Rates.” The Sun has reported that some of BC Hydro’s largest industrial customers in British Columbia are wasting electricity, including running idle equipment and leaving lights on, so they can get cheaper power rates for the following year. Power usage from the previous year determines how much power can be purchased at “base load” rates, while anything above that is charged a premium rate.

The two-tier rate was designed to encourage industrial customers to invest in energy-efficient technology so they can reduce the amount of power they must buy at the higher, second-tier rate. At least in the short term, the unintended consequences are canceling out some of the good intentions and the work of BC Hydro’s Power Smart Programs, which provide energy efficiency incentives.

It’s not sustainable when the Three Ps are reduced to a P, an uh-oh, and an oh-no.

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