Bad answer to a good question

[hfojvt]

Local News on Channel 41 has a segment called 'good question'

Tonight they did a segment on gas bills. Apparently Missouri Gas customers are getting charged $24 a month just for having their gas hooked up.

The TV station basically let the utility talk and say that 'it is no big deal, it covers our overhead costs' and the utility is planning to change the way they print the bills to hide this charge in the future.

Which is all very nice, but why don't they cover their overhead costs with their unit charges? Answer, because this way they have little people subsidizing big people. For example, here is my bill from five years ago. Units used - 9. Customer charge - 6.2, energy charge - 12.82 and COG charge - 45.17. Another bill from April, Units used - 5. Customer charge - 6.2, energy charge - 7.12 and COG charge 28. Then there's the summer, where I am charged $6.2 a month just to run my pilot lights.

Leaving that aside, from the two examples. My cost per unit when I use 9 units is $7.13 and for 5 units is $8.26. As the amount of gas used goes up, the average will get closer to the average cost of gas - $5 plus the average energy charge of 1.42. So they pay $6.42 per unit of gas compared to the small household paying $8.26.

If every customer paid the same per unit of gas, say $6.8, the utility company would have the same income but the small household would save $7 a month.

Okay, that seems like nickels and dimes. No big deal, but for tens of millions of households and small businesses over 12 months, it represents a huge subsidy that small households and small businesses are paying to big households and big businesses. Plus, Missouri's charge of $24 a month is pretty huge.

All basic utilities - electric, gas, and water, seem to price this way. Not only that, but as I have noticed this and tracked rate increases, the rates increase at the bottom more than they increase at the top. Thus, poor people get screwed, and they also face a higher rate of inflation.

[hfojvt]

1. an example of "The Screwing of the Average man"

Unfortunately, I see that book is no longer available. Perhaps dated since they have found new ways to screw us in the last 33 years.

http://www.amazon.com/Screwing-Average-Man-Richer-Poorer/dp/0553129139