by James Leonard Park


    Al Gore's mansion in Nashville, Tennessee
uses as much electricity as 20 average American's homes.
He tells us that he pays extra fees so that the impact of his electrical use
is balanced by benefits to the environment elsewhere in the world.
We have no reason to doubt that Al Gore does in fact make payments
to compensate for this high energy use.
But there are millions of other Americans who use more than their share
but who do not pay anything beyond their normal bills
for electricity and natural gas.

    The practice Al Gore uses is sometimes called "carbon trading".
Al Gore pays a carbon broker a certain fee each year.
The carbon broker sends some of this money to other organizations
that can reduce their carbon-dioxide emissions.
For example, the carbon broker could pay a power plant
that has discovered a way to produce electricity
with less release of carbon-dioxide into the atmosphere.

    Here is an even homier example of how such an exchange might work:
I save electricity in my home in Minneapolis
by using unheated water for my bath in the summer.
My water-heater is powered by electricity.
Thus during the hottest time of the year,
the temperature in my home reaches 90 degrees,
which heats the water standing in my hot-water heater
to the same temperature as the rest of my apartment,
so that I can take a nice bath without paying anything to heat the water.
In general, I never heat water during the summer months.

    Al Gore could do that same thing in Nashville,
where it is even hotter in the summer.
He probably has conventional ways of heating his water
either natural gas or electricity.
So this is the way he could balance his hot-water use:
Every day each of us takes a bath or shower, he in Nashville, I in Minneapolis.
He has a hot shower; in the summer I use unheated water.
Al Gore pays me 25 cents for the privilege of taking a hot shower.
And my electrical use is genuinely less than it would have been
if I also had taken a shower using water heated by electricity.
And I get compensated for the slight inconvenience of using less electricity.

    The reader will see immediately possible problems with this kind of trading.
How does Al Gore know when I use heated water?
Would we have to create a complex system to make sure
that those who claim to be reducing their emissions have actually done so?
And how would we measure the amount of savings they claim?
What if the reducers say that they could have used much more than they did?
For example, I could leave my hot-water heater on all the time,
as most people dowhich keeps some hot water available day and night.
This would use many kilowatt-hours of electricity every month.
Then I could could turn off my hot-water heater
and ask Al Gore to pay for the resulting reduction in energy use.

    Air-conditioning uses much more electricity than heating water.
Even tho my condo does have central air-conditioning,
I did not use it at all during the past six summers.
I assume that Al Gore did use air-conditioning.
Should he pay me 25 cents for each hour
I did not use air-conditioning while he did?
Since his home is 10 or 20 times larger than mine,
he would have to find additional people to reward for saving electricity.
How would such savings in other places be measured and certified?
How would the payments be coordinated
between those who use as much air-conditioning as they like
and those who are saving the planet by using less air-conditioning?

    What would prevent people who have actually reduced their energy use
from repeatedly collecting the same rewards from several different people?
Would there be a world-wide registry of all sources of carbon-dioxide
and of payments from those who have a large carbon footprint
to those who have reduced their carbon footprint to less than the average?

    I think we would have to abandon any such system
as far too complex and costly to administer.
Wherever there are possibilities of cheating, some people will cheat.
And how many people would voluntarily pay more for their electricity?


    But here is a fool-proof way to make sure
that Al Gore pays for his excess use of electricity
and I get rewarded for using less than my share:
The electric companies could be required to change their rate structures
so as to reward those who use less than average
and to penalize those who use more than average.

    But before we get into any numbers for this proposal,
since any such specifics might distract from the main point,
let's just consider the wisdom of big users paying more than small users.
If wide consensus is reached agreeing with this basic principle,
we should be able to create fair ways to shift the rate structure
from the small users to the large users.
Right now the small users are subsidizing the large users.
This could be reversed:
The large users could subsidize the small users.
And Al Gore might agree.
He would not have to estimate how much excess electricity he uses
and how much he should pay the carbon brokers
to purchase energy-reductions elsewhere.
The whole process would become automatic for everyone:
Large and small users alike would just continue to pay their electric bills.
Voluntary payments by conscientious people like Al Gore
would be replaced by mandatory payments to the electric companies.
Everyone would pay or benefit depending on their actual use of electricity.
Every home has an electric meter,
which records exactly how much electricity is used.

    (And in order not to harm the electric utilities and their shareholders,
I would propose that there be no net change in revenues
for the companies that generate electricity.
In other words, the electric companies everywhere
would still get the same total amount of cash
each month for the electricity they provide.
But the pricing of electricity would be changed
so that the people who conserve electricity
(who use less than average) would be rewarded by lower costs
and the people who continue to use more than average would pay more.)

    Because providing electricity is a monopoly in most places,
there are Public Service Commissions (sometimes with other names),
which are responsible for approving or disapproving
every rate change proposed by the public utilities.
Usually the providers of natural gas and electricity
request higher rates than they finally get,
but the companies are almost guaranteed a reasonable profit.
The Public Service Commissions do not require
utility companies to operate at a loss.


    Now we get to some actual numbers,
based on my own electrical use,
which is well below average for a variety of reasons.
For one thing, I am home only half of the time.

    I now use less than 2000 kilowatt-hours per year.
In 2016, I used about 132 kwh per month.
All taxes, fees, & other special charges included,
my average cost is 20 cents per kwh.
My total cost for electricity was $313 or $26 per month.

    A kilowatt-hour (kwh) is the basic unit of electrical power used.
It is the amount of electricity to keep a 100-watt bulb burning for 10 hours.

    The basic cost of electricity is supposed to be about 10 cents per kwh.
But my cost is twice as much because of various charges, fees, & taxes.
The more electricity I use, the less it costs per kwh.

    Each electric customer can check his or her electric bill
to see how much these costs are.
The cost per kwh is your total bill
divided by the number of kwh you used that month.
Or you could calculate it for a whole year:
What you paid for electricity for a particular year
divided by the total number of kilowatt-hours you used that year.

    According to figures supplied by my electric company,
the average monthly residential use with overhead line service
(which means almost all homes in Minneapolis, including my condo)
is 544 kwh, costing $71.11, which is 13 cents per kwh in 2016.
This does not include added fees and taxes.

    This means that the average household
uses more than 4 times as much electricity as I do.
This is about 6500 kwh per year.
The electric rates could be changed
so that the smallest users pay only
what it costs to generate the electricity.
And the largest users pay more than the average cost.

    We could create a new rate structure that is fair to everyone:
(1) Fair to the electric company and its shareholders
because their total income would still include the authorized level of profit.
(2) Fair to the small consumers of electricity
because the cost per kilowatt-hour would be lower for the small users.
(3) And fair to the large users of electricity
because such households can afford to pay higher rates
for the amounts of electricity they use beyond the normal level.

    First, we should eliminate the basic service charge,
which is added to each bill without regard to the amount of electricity used.
For me, this is $8 per month.
And in the summer months (when I use the least electricity
because I do not use my air-conditioning),
this basic service charge is over 1/3 of my electric bill.
Here's an example of one specific summer month:
Between April 19, 2016 and May 18, 2016, I used 94 kwh,
for which I paid a total of $22.96.
For this lowest month of the year,
my total cost for electricity was 24.4 cents per kwh!
(Just for contrast, my highest consumption was February:
183 kwh, for which I paid $35.09, which is 19 cents per kwh.)

    The public service commission (which must approve all rate changes),
might agree to a monthly minimum of say $5 per month,
even when zero electricity is used.
This minimum would replace the basic service charge.
This would cover the costs of having a house connected to the grid.
And it would cover the first 50 kwh if only a small amount of electricity is used
as when leaving the refrigerator running while away for a month.

    The smallest consumers of electricity could be rewarded
by being charged 10 cents per kilowatt-hour
for any amount of electricity less than 100 kwh per month.

    For the next 100 kwh, all consumers would pay 11 cents per kwh.

    Those consumers who used more than 200 kwh per month
would pay 12 cents per kwh for their power use between 200 and 300 kwh.

    And the even larger users of electricity would pay a still higher rate
for the next 100 kwh they use each month.

    This step-by-step rate structure would continue to increase
until the income for the electric company
is the same as under the present rate structure,
which costs the smallest consumers the most per kwh.

    In other words, at present we have an upside-down rate structure:
The smallest consumers of electricity pay the most per kwh.
And the largest consumers of electricity pay the least per kwh.
This could easily be reversed:
Let the small consumers pay the lowest rates.

    How would this apply to me?
To simplify, let's assume that each month is the same: 130 kwh.
For the first 100 kwh, I would pay 10 cents per kwh or $10.00.
For the next 30 kwh, I would pay 11 cents per kwh or $3.30.
With the basic service charge eliminated,
my total per month would be just: $13.30.
This comes to an annual cost of about $175,
when other taxes and fees (over 12%) are added.
This is 56% of what I now pay (2016).
I would be rewarded for being such a small consumer of electricity.

    For the average home in Minneapolis,
the following would be the cost for 600 kwh per month:
first  100 kwh  $10.00
next 100 kwh  $11.00
next 100 kwh  $12.00
next 100 kwh  $13.00
next 100 kwh  $13.00
last  100 kwh  $13.00

total:                  $72.00
plus 12.4% for taxes and fees
grand total:      $81.00

    This is somewhat above of the average cost at present.
So this rate structure is about right if the basic service charge is eliminated.
The top rate (here 13 cents per kwh) would be established
by promising to keep the total revenue of the electric company the same.
The top rate might have to be increased to 14 or 15 cents per kwh.

    This proposed new rate-structure would not apply
to very large consumers of electricity,
such as office buildings or industrial plants.
If they have the space available,
large consumers of electricity can construct their own power plants,
where they can generate electricity for less than 13 cents per kilowatt-hour.
And it might be better environmentally
to generate the electricity near where it is used.
Electric power is consumed by moving it around.

    Establishing lower rates to the smallest consumers
would end the unfairness
of the smallest consumers subsidizing the largest consumers.


    Such a new rate structure would not depend
on anyone being concerned about the environment
or feeling charitable toward the small users.
Large users would not be required to do their own math
to see how much they should pay for their excess use of electricity.
And they would not have to locate the people
who should receive the payments.
Everyone would be rewarded or penalized by the automatic calculation
performed by the computer of the electric company.

    The computer that generates each electric bill
would easily know how much to charge for each kwh of electricity used.

    There would be no honor system
such as me saying how often I had a bath with unheated water
and Al Gore saying how many hot showers he took.
I would not have to report how many hours of air-conditioning I did not use.
And Al Gore would not have keep track of
how many hours of air-conditioning he did use.
Our respective electric bills would tell the whole story,
recording our electric use down to the last kilowatt-hour.

    All people who are using more than their share of electricity
would be automatically charged for that privilege.
And their higher electric bills would compensate
for the lower amounts paid by small consumers of electricity.


    Because there would be a direct relationship
between the amount of electricity used and the size of the bill,
each consumer who uses a small amount would be rewarded.
And each consumer who uses a large amount would be penalized.
Especially the large consumers, who are paying 13-15 cents per kwh
for each additional kwh they use,
would be strongly motivated to find ways
to reduce their excess use of electricity.

    Such a new rate structure for electricity
would probably reduce the total amount of electricity used.
This would help to create a greener world for everyone.

    (Because the sun is coming up as I write this,
I just got up from my computer to turn off some of my lights.)

    I live in a small condominium overlooking downtown Minneapolis.
I can see the skyscrapers from my bed whenever I open my eyes.
And there are always some lights on
even on long week-ends.
If the electric rate-structure were suddenly changed,
the executives of all large companies
would order better controls on the use of electricity.
Instead of a lights-out police telling office buildings to turn off their lights,
these users would get a strong message in the form of their electric bills:
You are wasting lots of electricity by keeping your lights on all the time.

    A new electric-rate-structure mandated by the Public Service Commissions
would be much better than a carbon tax.
No new systems would have to be established.
No new bureaucrats would be hired.
The in-place electric meters
and the computers already calculating our electric bills
would do all the work.
Large users of electricity would pay more per kilowatt-hour.
Small users would pay less for their power.
And all users would be rewarded for any reductions they achieve.


    Someone who reads that I use less than 2000 kwh of electricity per year
might be tempted to dismiss me as a freak who lives in the woods
without any modern appliances.
But this is far from the case.
I do have and use the following electrical devices:

Computers and printers:
    I am writing this essay on a computer screen,
with the keyboard in my lap.
And I have a more modern computer for Internet work.
I use my computers a few hours each day I am home.
I also have a laser printer,
upon which I print all of my books.
I believe this is one of my largest uses of electricity,
because the lights dim just a little
when each sheet of paper gets printed.

Television and radios:
    I have a color television in my bedroom,
which I use almost every day.
And I have radios in several rooms,
which are on a few hours each day.

    I have a standard refrigerator, which I keep operating all year round.

Hot-water heater:
    As mentioned before, I have an electric hot-water heater,
which enables me easily to turn it off whenever I do not need hot water.
I find that it take about 30-60 minutes to heat enough water for a bath.
And during the hot weather in the summer,
the water in my hot-water heater gets up to 90 degrees F
simply because that is the air temperature in my apartment.
So I do not need to heat any water during most of the summer.

    I have a forced-air furnace for my small condo.
Electricity is needed to run the fan whenever it is either heating or cooling.
Electricity is the power used for any cooling I do.
(I have not used my AC for the last eight summers.)
My basic fuel for heating is natural gas,
which is another story.

    Also, when I am away from home,
which is about half of the hours of any week,
I turn down the heat to 40 degrees F during the winter months,
since there is no one else home who needs to keep warm.
My plants do not thrive a much in the winter,
but that is a trade-off I am willing to accept.
And even during the coldest times away,
the temperature does not sink to 40 degrees,
showing that the furnace was not operating while I was away.

    I have the normal number of lights
needed for lighting a condo of 1,000 square feet.
And two of these are compact florescent bulbs,
which use just 7 watts of electricity.
In November 2008, I added 7 more compact florescent bulbs,
replacing incandescent light bulbs of various sizes.
It is uncertain whether these new bulbs have made much of a difference,
since lights are only a small part of my electricity use.

    Here are my totals for recent years:
1972 kwh
2000 kwh
1981 kwh
1795 kwh
1925 kwh
—2342 kwh
—2055 kwh
—2150 kwh
—2032 kwh
—1895 kwh
—1585 kwh

    The changes from year to year are probably not significant.
But the total use is a good measure.
I have lived in this condominium for 12 years now.
Because I am the first owner, my electric meter began at zero.
(Actually the first 3,000 kwh was used by construction workers
in the process of completing my apartment.)
At the end of 2016, I total reading was 25,703.
This is about 2150 kwh per year.
When I had occasion to see the electric meters of other owners,
I noted that my reading was well below all of the others.

Cooking appliances:
    I have a small microwave oven,
where I do most of my cooking.
I also have a toaster oven for appropriate heating.
My condo did come with a dishwasher,
but I have only used it once, after a Christmas dinner with relatives.
Otherwise, I never have enough dishes to warrant turning it on.
So I wash all of my dishes
by hand in the sink.
And sometimes the 'hot' water for washing dishes is just warm,
but that does a fine job anyway.

Washing machine and dryer:
    My brand-new condo also came equipped
with a washer-dryer combination.
Both of these use electricity to do their work,
including the heat needed to dry my clothes.
I do not use my washer and dryer as often as many people.
But that again is a personal choice.

Garage space:
    I also have a garage space on the ground floor,
which I rent to another owner, since I have no car.
The electricity needed to light this garage space 24 hours a day
and the power needed to open and close the garage door for the building
are all included in my monthly association fee.
Also as a condominium owner,
my share of the cost for common spaces such as the lobby and hallways
is paid as part of my association fee.

    However, our condominium board of directors
has installed solar panels for our roof,
which might provide half of the electricity needed for our common areas.

Cooking range:
    I have a gas stove, which only uses electricity for its clock
and to provide a spark to start the gas burning when I turn it on.
I use so little natural gas that my bill during the summer
shows zero used each month.

    I have an exhaust fan in my bathroom,
which I use sometimes.
And the fan in my furnace/air-conditioner
could be used to keep the air moving.
But I never use it for this purpose.
Some people have their furnace fans running all the time,
which uses a lot of electricity in a year.
    I also have a small air filter, which I almost never use.
    There is also a hood ventilator over my cooking range,
which I seldom use.
    My condo is on one corner of our building,
so I can take advantage of natural cross-ventilation
more than half of the year.
    I have a vacuum cleaner, which is powered by electricity.

    So all-in-all, it seems that I have all of the appliances
that use electricity in most modern homes.
I am able to keep my use of electricity low
because I use all of these carefully.
And when I am not home, none of these is operating.
Only my refrigerator and my electric clocks
are operating all the time.


    When you look around your own home,
you will probably find that you have the same devices using electricity.
But all of us can reduce how often we use each device.
When you are not watching the television or listening to the radio, turn it off.
When you leave a certain area of your home, turn off the lights.
Don't leave your computer running all day
so that you can have instant access.
It only takes a minute or two for even the slowest computer
to start working again after it has been resting for a few hours.

    If the electric rates were changed as suggested above,
would you look for possible ways to save electricity?


    James Park is an independent philosopher and ecological advocate.
He began his college education in the natural sciences
and later turned to philosophy.
He lives very simply without a car
or other energy-consuming habits.
Much more about James Park will be found on his website:
James Leonard Park
Free Library.

Created 9-20-2007; Revised 9-25-2007; 10-11-2007; 11-4-2007; 2-9-2008; 10-3-2008; 11-26-2008;
3-7-2009; 4-18-2009; 6-10-2011; 12-10-2011; 9-14-2012;
2-22-2014; 2-27-2014; 2-28-2014; 3-1-2014; 3-14-2014; 5-26-2014; 8-9-2014; 1-28-2015; r 1-3-2017; 1-4-2017;

The essay above has now become a chapter in a book called:
Fixing America: Ways to Improve the USA.
Find several additional ways to make a better future.

Go to other on-line essays by James Park,
organized into 10 subject-areas.

The views and opinions expressed in this page are strictly those of the page author.
The contents of this page have not been reviewed or approved by the University of Minnesota.