My wife and I were shopping at a fun boutique down on Center Street. We found a couple of shirts that I liked and got in line to buy them. We overheard the conversation going on between the store owner, who was working the register and the shopper in front of us. The shopper had selected three shirts from the store, but only wanted to pay for one of them and wanted to exchange two home-made shirts for the other two boutique shirts. The home-made shirts were actually pretty cute1, but were obviously of inferior quality2 than the boutique shirts. The store owner explained that she works with local producers, but that they are carefully selected and sign contracts so that the boutique can get a reliable supply of clothing at a good price. She explained that she buys the shirts wholesale and has to mark them up in order to pay for, among other things, rent for the store and wages for employees.
I was in line behind this customer thinking to myself, "it's great that we have have crafty people who are locally producing clothes, there are a lot of advantages, and we should support them, but it is silly to expect to get full retail, at your own convenience, regardless of the opinion of the retailer."
Then the lady in front of me said matter-of-factly, "Well, that doesn't matter, there is a new law called "Net Clothing" which requires you to charge me only for the difference in quantity of clothes that I buy. She laid down the home made shirts, cash for the third shirt, picked up the three boutique shirts and walked out of the shop.
The owner was pale and in shock when I stepped up to the counter. When she came to, she apologized to me and said that she'd have to charge us 5% more for our selection. She still had to pay rent and her employees, and now had an unpredictable stream of goods that she would have to compensate for.
I left the store thinking, "that law doesn't make sense. It's just not fair."
I'm sure you realize that this is not an actual experience, but an allegory. There is no law (that I know of) called "Net Clothing", but there is a common law across US called net metering which requires power companies to give full credit to "distributive generation" customers (those who produce power by solar, wind, or other technologies) for any electricity that they add back to the grid. Because Provo Power is a publicly owned utility, Utah's net metering law doesn't actually apply, but we have previously adopted a "Net Metering" policy on our own.
1,2In the allegory I suggested that the home-made shirts were "actually pretty cute" but were of "inferior quality". By "actually pretty cute" I'm acknowledge that roof-top solar has a lot of attractive qualities, and like local art and crafts, should be encouraged. By "inferior quality" I'm referring to the intermittent nature of the power source. Solar can't be used at night, but at least we know that and can plan on it. During the day, solar *might* be available, but it may not be. When securing contracts, solar production can't be relied on. And those contracts cost money whether the energy is used or not. My point is that there are pros and cons to solar energy.
I believe in solar energy. It isn't cost effective now, but future advancements will make it so. Those future advancements are funded by the commercialization of the current technology. Incentives are needed to speed commercialization and fuel the advancement. Incentives should be defined, deliberate, and phase out, just like the incentives offered at the state and federal level. Abusing the current electric rate system to act as an incentive is poor policy. It leads to things like sub-optimal panel placement which maximizes energy production, but not value. Provo will soon have smart meters deployed to every residence and will have a smart billing system which can be used to align customer incentives with the costs of providing electricity. In the mean time, Provo Power customers who are considering installing solar panels need to understand that they can not assume that the current electric rate structure will never change.
Resident who want to lessen the environmental impact of their electrical usage may want to consider Provo Power's Renew Choice program.
Bad allegory. Sorry, but just bad.
ReplyDeleteLet's see if I can try and fix this terrible Allegory.
ReplyDeleteMore apt (but still lacking) would be this scenario:
My wife and I needed 100 feet of copper pipe to finish our new bathroom, so we went to the Metal Store, the only place in Provo where someone can buy copper pipe. The Metal Store is owned and run by the city. We picked out our copper pipe (there is only one option of copper pipe) and waited in line to pay. In front of us was a woman who was also purchasing 100 feet of copper pipe, but along with that copper pipe was a pile of scrap copper. When she checked out, the cashier first took and weighed her scrap copper, wrote down some numbers, and then rung up her purchase. The woman in front of us was charged $800 for her pipe.
When we checked out, my wife and I were shocked to see that the price for our copper was $1000. We asked why the price was different and the cashier responded that they have a policy, passed by the city and the Board of Directors of the Metal Store, to encourage recycling. When someone recycles their old metal, it saves the costs of mining and smelting new copper, so the process to make copper pipes is much less. So the Metal Store gives a credit to people who bring in that old metal. The cashier also said if we wanted to help with the recycling effort, we could actually pay $1100 for our pipe and the Metal Story would take a portion of that extra money and purchase scrap metal from the scrap yard down the road.
My wife and I left the store wondering whether or not we should consider collecting scrap metal around the house before our next trip to the Metal Store.
Love the copper pipe example. MUCH more relevant.
ReplyDeleteThe copper pipe version is the correct allegory and makes much more sense. Why should the residents pay extra for Renew Choice when they are already getting it from customers who use solar and are providing to the city through net metering.
ReplyDelete