Thursday, 13 April 2017

Should we adopt Nicaraguan Domestic Electricity Pricing Policies?

If we adopted the Nicaraguan approach, low consumption users would be charged less per unit, and cross-subsidized by domestic consumers who use more.

"Currently, there are cross-subsidies in the tariff structure. Medium voltage consumers pay higher tariffs that serve to subsidize lower tariffs for low voltage consumers. Users that consume less than 150 kWh per month receive transfers from the rest of the consumers. The lowest-consumption users (0-50kWh/month) benefit from reductions between 45% and 63% in their average tariff. Consumers above the 50kWh limit also benefit from the subsidy scheme to a smaller extent." (Wikipedia) 

Easily done with smart meters! No net cost to the Government! Incentive to use less!