New Charging System for Residential Consumption of Electricity

Energy as a national wealth should be distributed fairly among people. Household usage of energy as a basic essential made regulating on public utilities significant enough to be argued on. In other hand changing the patterns of utilities consumption among different groups of consumers and affect of price on them (Particularly those who will lose more of this, like low incomes and aged) made policy makers and policy analysts to argue on the different techniques on determining the fair price. In the last two decade we are encounter with a dramatic deterioration in the living standard of lower income households, particularly in developing countries, which is a matter of primary social concern. The proper price policies on public utilities could lead us to improve equity in the electric consumption. Both supply and demand of electricity could be controlled with price. Because of the monopolistic nature of electricity, in which consumers are limited, here the attention is paid to the demand side. The supply side could plan their developing program to reduce the costs and increase fficiency to realize their proper profit. It definitely does not mean that any regulation should be decided regardless to suppliers side, regulator should pay attention not to make limitations in devising for firms. Although the price mechanism would be a powerful implement for suppliers in controlling the demand but it is needed to protect the benefit of consumers. The incentive in electricity consumption is certainly affected by the rate of electricity. This affect naturally is not significant for those consumers with higher level of income as the share of electricity charges is a small percentage of their income[1]. The low and middle income families have to change the pattern of their consumption and the restriction of Consuming this essential commodity would be tolerate mainly with low income families. This affect is much clear and stronger in developing countries, where the lack of supplying problem makes suppliers strongly control the demand. In developed countries also discrimination of the affect is not as clear as in developing countries but the cross-subsidy could be seen between different groups of consumers. From the other side, electric utility contend deregulation have to bring price reductions for all customers, large and small. In fact, residential customers are a considerable block of customers the electric companies sell power to, they might have just as much power as a group as industries do. Residential customers could be short changed while big businesses get unexpected gain in deregulation of the electrical utilities industry. Residential consumers and small customers are being left out of the electricity price reductions that are expected to come from increased competition. Large electricity customers will benefit most in the deregulated environment. To protect small consumers in the deregulation of electric industry some methods like grouping consumers in local communities to band together and form electricity-buying pools are proposed, but it is just an alleviation. Residential consumers are not able to gain of choosing the power company of their choice, in a competitive market designed to lower prices to huge users. It is necessary to think of introduction any other regulation in reduction the price they are imposed.