Change the rules so power and gas companies profit the more they cut how much their customers use
In short
- Power and gas companies earn their profit without depending on how much energy they sell.
- Each company must reach a set amount of energy savings in its customers' homes every year.
- A company that cuts more than its target is allowed extra profit on top.
- Help with saving energy goes first to households that are struggling to get by.
If this comes true
In the kitchen of a retired male postal worker who lives alone in an old wooden house, a power company worker carries in a new refrigerator for free, and this winter's electric bill is lower than last year's.
Perhaps
In homes that did not get any energy-saving work, the price per unit of electricity might creep up, and there may be more summer nights when people go without air conditioning to save money.
Water so far 💧 0
The proposal in detail
This proposal changes how profit is decided for power and gas companies that own the power lines or gas pipes and whose rates are set with the approval of a public agency. First, the income a company receives is fixed in advance, not by how much it sells but by the amount needed to maintain its equipment and deliver energy reliably to customers. If use falls below what was expected and income comes up short, the gap is adjusted in the next year's rates, so the company does not lose money when use goes down. On top of that, each company is required to cut its customers' use by a certain percentage every year, by doing things like insulation work, replacing old equipment with efficient models, and giving advice on how to use energy, either at its own expense or by hiring contractors. Part of this requirement must be met in low-income households and old homes. A company that cuts more than its target is allowed extra profit in proportion to the amount beyond the target, and a company that falls short is fined. The amount cut is checked by a body independent of the company, by comparing usage records from before and after the work. In markets where customers can freely choose who they buy electricity or gas from, the requirement is placed on the companies that own the power lines or gas pipes, not on the retail sellers.
BenefitsThe company that most wanted to sell becomes the one that most wants to cut
The strength of this proposal is that it turns the force that has held energy saving back into a force that pushes it forward. Companies do not lose money when use falls, and the more they cut, the more profit they earn on top, so they have a real business reason to push ahead with insulation and equipment replacement in customers' homes. Because companies already hold usage records for each home, they can find wasteful homes and old equipment and reach out on their own initiative. Unlike subsidies that wait for people to apply, the work can reach people who are unfamiliar with paperwork or have no time, and the rule that the requirement must be met in struggling households makes sure that happens. Fewer homes that people must endure in the cold or the heat also protects the health of those who live in them. When use itself goes down, fewer new power plants and power lines need to be built, and that cost does not have to be added to future rates. Another advantage is that, unlike subsidies that depend on each year's budget, this is built into the rate system, so it is more likely to continue through changes of government and ups and downs in the economy.
DrawbacksUnit prices rise, and homes that skip the work lose out
If this proposal is chosen, the cost of the energy-saving work and the income guaranteed to companies even when use falls are all paid by customers through their rates. When use goes down, the price per unit goes up, and homes that did not get the work, people who rent and cannot decide on the work, and people who already use very little are made to pay the higher unit price without getting any benefit from the reduction. To hit their targets cheaply, companies may put easy jobs like swapping light bulbs ahead of the more laborious insulation of old homes. It is hard to verify how much use really fell, and room remains for companies to count as their own achievement reductions that came from the weather or changes in how people live. Guaranteeing income regardless of how much is sold could also excuse sloppy management and become a pretext for passing even wasteful costs on to customers. The agency that approves rates needs deep expertise to see through a company's claims, but in regions that lack that ability, the system could be twisted in the company's favor. In markets where customers can choose who they buy from, the companies bound by the requirement are not directly connected to customers, so their outreach will probably have a harder time getting through.
Learn the background
It is widely known that using energy without waste lowers both bills and emissions, and subsidies for insulation and efficient equipment have been offered in many places. Even so, energy saving has not advanced as much as one would expect. One reason is on the household side: the upfront cost and the hassle of the work are big, information is lacking, and the households with the least time or money are the ones that find it hardest to act. Another reason, one that is rarely discussed, lies in how the companies that deliver electricity and gas make money. In many places these companies operate under a system in which profit grows the more they sell, so helping customers save energy means cutting their own income. The companies that are closest to customers' lives, and that hold the usage records for every home and have the power to arrange the work, are placed in a position where they have reason to turn their backs on energy saving. Subsidies spread for a while each time a government sets aside a budget, but they tend to favor households that have the time and means to apply, and they stop when the money runs out. Unless the quiet mechanism of how company profit is decided changes, piling on appeals and subsidies will not change the overall flow very much.
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This proposal was written in Japanese by AI (claude-opus-5-5, policy version 2026-10-23a) and translated by AI (claude-sonnet-5-5). Nobody has checked the facts. Read the original (日本語) How the AI writes