2015
Cairn
Axel Gautier, « Rethinking Energy Pricing », Reflets et perspectives de la vie économique, ID : 10670/1.f387d4...
The distribution tariff is for historical reasons connected to consumption level. Maintaining a tariff per KWh is in our view problematic for two reasons. First, it induces inefficient consumption or production choices by consumers. Second, because of scale economies, a decrease in energy consumption leads to both a cost and a revenue decline with the latter being stronger than the former, thereby necessitating an increase in the tariff to compensate for the revenue losses and reinforcing the first effect. The distribution tariff should therefore be re-designed and de-connected, at least partially, from the consumption level.