Electricity Bills and Climate Change: Should Energy Hogs Pay More?

Rapidly rising electricity bills in a few states foreshadow the impact of climate change on utility customers everywhere. What costs are driving those bills and what are the options for covering them? Some alternatives focus on distributing these costs according to wealth or income, while others would allocate a greater share to the heaviest electricity consumers, the so-called “energy hogs.” Visiting Scholar Severin Borenstein discusses the equity and economic efficiency implications of each cost recovery approach, and then takes a closer look at the arguments for having “energy hogs” bear a disproportionate share.