"Ratepayer," RIP

This week, I asked the California Public Utilities Commission to banish the word “ratepayer” from its institutional vocabulary and instead use a better term to describe the people who pay utility bills, which is pretty much all of us.

I made the request during a hearing that the Commission very commendably convened on what it means to be a “sustainable utility,” a concept the Natural Resources Defense Council has long supported. The Commission was exploring how it can help utilities reinvent their businesses in ways that would advance both environmental and economic goals.

Happily, early indications are that the California Commissioners aren’t adverse to killing one of the most common words in their official dialogue with utilities about how much all of us are going to pay for their services.

You may not care whether you’re described as a “ratepayer” or a “customer.” And possibly our campaign to kill “ratepayer” seems like “inside baseball” or merely a symbolic gesture. But it may have a larger impact on lowering your bills and helping California reach a clean energy future than you’d expect.

Personally, I’ve always disliked the term “ratepayer.” Not only is it arcane and archaic, it seems to me to be dehumanizing and demeaning. After all, none of us wants to be viewed solely as someone who pays, particularly when we’re buying essential and diverse services with major economic and environmental consequences. (For example, electricity generation alone accounts for about two-thirds of the sulfur dioxide and mercury emissions, two-fifths of the carbon dioxide, and one-sixth of the nitrogen oxides – the worst of the toxic air pollutants and greenhouse gas emissions.)

But the problem with “ratepayer” goes deeper, especially in the electricity industry. Too many insiders still think of electricity as a commodity and worry endlessly about the “rate” people are paying per kilowatt-hour, when few -- if any -- customers have a clue what a kilowatt-hour is or how much it costs (we have a much better sense of the price of a gallon of gasoline and how far it will take us). 

What people care about is the bottom line on their utility bill, not the “rate” for each unit of energy delivered over their electrical wires. Most people would happily pay a higher rate for fewer kilowatt hours if energy efficiency improvements in their appliances and home or business pushed the bottom-line of their bill lower in the process.

Utility insiders lose sight of this with their constant references to “ratepayers.” They continue to focus on the “rate” instead of the total cost to “bill payers.” This makes them reluctant to aggressively push for energy efficiency because they fear reductions in energy use will cut into their sales so much they’ll have to increase “rates” for delivering kilowatt-hours and therms to cover their costs -- and customers will protest. But is there anyone on earth who wouldn’t trade a slightly higher utility “rate” for a lower utility bill bottom-line?

That’s why it’s important to change the focus so we can reach our goal of increasing energy efficiency and lowering greenhouse gas emissions. While there was never much of an organized constituency in support of the term “ratepayer,” misleading language and stereotypes like this can be corrosive, and it’s past time to fix this one. 

There are plenty of good replacements for the term, but we might want to start with “people” and “public” -- words that provide a much fuller sense of what really matters about those who pay the electricity and natural gas bills that make our modern society possible.