29 February 2016

The Dutch already do surcharge and rebate!

Long time readers of this blog will know that I recommend higher-than-cost water prices as a means of incentivizing conservation -- with rebates to customers (per household or per capita) of resulting excess revenues. Many people have asked "where is this also occurring?" but examples from the water sector are scarce. (Most involve "unexpected" high revenues.)

Well, the Dutch do not have such a system for water (they already have too much so cost recovery is their only target), but they do have such a system for gas and electric.

Last month, I reported my annual metered gas and electricity use to my energy company so they could reconcile my estimated payments against what I actually owed.* In this process, I learned of the "vermindering energiebelasting" (energy tax rebate), which the government gives to all households, regardless of use, on a flat rate (about €1 per day).**

This "pay for consumption, rebate per household" policy is exactly what I've been talking about all these years, and -- I'm pleased to report -- it has not affected my desire to use less energy at the same time as it makes my life more affordable.

Bottom Line: Sound policies improve efficiency without threatening fairness.

* Yes, indeed, this method is way cheaper than smart meters!
** Read under "Belastingvermindering energiebelasting" here.

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