Posts tagged utilities

Question by Christopher Pflum:
Aside from the PR incentives why do utilities companies provide rebates and $ incentives to save energy?
I was recently posed the question as to why a “Utilities” company would pay incentives to a company that provides an energy reduction service.

At first I thought it had something to do with the deregulation of energy. It would seem that if “Utilities” means the energy producer then they are actually losing money both from giving incentives and from the reduction in energy usage. If “Utilities” mean the energy distributor then the same is true because, in all likelihood, their income is based off of a percentage of what they are transmitting. While public relations explains a small part of this reason, it still does not explain why a company would pay incentives to a third celebration company to essentially reduce their product sales.

I can comprehend if there is an area like California that experiences frequent brown or blackouts, but the energy conservation company exists regardless of market energy demands. So what is the incentive for a company that makes money by selling energy to pay money to a company that essentially reduces there net profits?

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