Coca Cola Pleads with Customers to Stop Buying So Much Coke
Hoping to avoid shortages of their flagship product, Coca Cola has begun asking consumers to limit their purchases of Coke. "We realize that we have an excellent product and it's been really hot lately, but please, if you could just cut back a little, it would help a lot," said company spokeswoman Greta Hansel. "We're going to have to stop shipping to stores in certain areas pretty soon if people don't reduce their Coke consumption."
This is the scenario I think of every time I hear an ad from a power company asking me to "save energy." What the hell kind of business asks people to use less of its product? Who would buy stock in such a business? In the real world, if there is less of something available, prices go up so that people use less and it never runs out. Unfortunately, power companies don't operate in the real world. They operate in a world where they have to ask permission from Mommy to raise rates.
So every summer, I turn on my air conditioner and completely ignore the lighted freeway signs urging me to "flex my power." What's the worst that could happen? I'll tell you what. I could turn up my thermostat and sweat it out, and then have a power outage anyway because my neighbors chose not to. So the thermostat stays at a comfortable temperature, and I hope my neighbors fall for the propaganda.
The solution is not for the local utility czar to allow the monopoly power company to raise rates during shortages. That would merely result in more "shortages" ala Enron, where power plants are intentionally taken offline or not built in order to squeeze the consumer for as much money as possible for each kilowatt hour. What may work better might be for people to contract directly with power retailers who then pay a fee to the company that maintains the power lines. The retailer would own the meter at the customer's premises and handle billing.
Since there would be competition among power retailers, there would be no reason to regulate electricity rates. Any concerns about poor people's not being able to afford power could be alleviated through direct subsidies to the poor people in question. Retailers would have every incentive to run at an economically efficient capacity level, with the best balance for peak times of time-of-use metering, extra peaking capacity, and energy storage. The transport providers, through SLAs and/or charging a fixed fee per kilowatt-hour mile or something in between would have every incentive to keep their own plant operational. There could still be problems as long as there is only one electricity transport provider for a given area, but electricity retailers would have a lot more pull than individual consumers to get problems fixed, and the benefit to the retailers of time spent hounding the transport provider would be much higher compared to the cost; suddenly beating up PG&E becomes much more of a private good.