For years Manitoba Hydro has been promoting energy efficiency through its Power Smart program. They paid for numerous TV ads, they had a trade-in program for LED Christmas lights, they sent me not one but TWO packages of CFL light bulbs, and if I stop procrastinating and finally get around to insulating my attic, they will pay for most of that too.
I am not going to tell you that these things are not worthwhile. They are — some more than others perhaps — but efficient use of energy is an important cause. It is becoming all the more critical as evidence grows about climate change, and also as Manitoba Hydro contemplates financing over $20 billion in new megaprojects to feed projected increases in demand (and money-losing exports, but that’s another post for another day). All of these efforts, however, are not enough to keep Manitobans from being one of the largest per-capita energy consumers in Canada, and by extension, the world. This should be no surprise because the single biggest driver of this energy consumption has never been directly addressed: cheap electricity.
Nothing changes behaviour like good old fashioned money, and when power is cheap, people will consume more if it. This is simple supply and demand. In fact it’s about as simple as it gets, but acting on this is anything but simple when people come to expect cheap power and when the government has even declared that it constitutes the “Manitoba Advantage”. How on earth can we tamper with that???
Well, I proposed a way on a different blog before the last Provincial election: inverted electricity rates. Set a cheap base rate for the first X kWh of power in a given billing cycle, with ‘X’ being enough to power a modest-sized energy efficient home, and then sell everything above that at a rate equivalent to the cost of production or a little higher. (I want to say “market rates” but when electricity is sold for 1/3 the cost of production in some cases, it is clear this is no ordinary market.)
The low initial rate will allow the politicians to say, truthfully, that many people will pay less for power with this new pricing system. For all others, they will finally have some real incentive to upgrade their homes and change their lifestyle to conserve power. It makes so much sense because it’s based on fundamental economic principles and the realities of human behaviour. This isn’t me being a genius — it is an idea that has already been implemented by other governments including British Columbia, one of the few places to see an actual decrease in per capita energy consumption in recent years. It was also part of the Green Party of Manitoba’s demand management strategy in the last election, incidentally.
I was happy to read in the Free Press last weekend that this system might finally come to Manitoba. It is part of a demand-side management plan (DSM level 2, to the kidz on the street) that also includes an allowance for users to generate their own power and even sell it back to the grid, which is something that Hydro has been very reluctant to support in the past. In the plan, the inverted rate system is referred to as “conservation rates”. There is no mention of what the rates may be, and the whole plan still needs to be approved by the premier, but it is at least encouraging to see these ideas finally get tabled.
My fear is that the rates will not be differentiated enough to make a real difference, or that Greg Selinger may scrap it outright to avoid the negative optics of increasing hydro rates (for some people) after promising that they will always be low as long as they are left in charge. One more (real or perceived) broken promise could be the nail in the NDP coffin.
However I hope that common economic and environmental sense prevails, and that Manitoba Hydro finally gets the leeway it needs to encourage real action on energy conservation. Maybe if they implement these conservation rates the $20 billion mega project expansion plan could be scaled back … and maybe I’ll get off my ass and insulate my attic.