Veteran's Energy Conservation

Essay by awesomeman281College, UndergraduateB, October 2009

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This article lets the current Veteran employees know that they will be letting its consumers know of a policy in place to give a rebate for the choice of an energy efficient appliance in place of a non energy efficient appliance. The cost of a non efficient appliance is higher but they will be offering rebates in order to encourage the switch. In the long run this should save consumers money in face of the rising cost of gas. The Indiana Utility Regulatory Commission has allowed Veteran to change the way it charges its customers. Veteran can separate the rate it charges. One charge will be for distribution and the other will be for the gas used, this has not been done in the past. In the past, Veteran has only charged for the gas used.

The author of this article clearly states the purpose of this article by telling the Veteran employees that they are informing the public about rebates offered for choosing energy efficient appliances.

The possibility of conservation is what interested me in this article and the effect on the consumer costs is why I chose this article. In my opinion, I disagree with the choice to give rebates by Veteran. With this decision they are now able to charge a second rate so that they are not losing money by offering these rebates. Consumers that cannot afford or are unable (such as renters) to make these changes, to receive the rebate and to receive the benefits of the more efficient appliance, are now going to be paying the high gas bill and paying the second distribution rate.

I do have some direct influence in regards to this issue because my father works for Veteran. I actually obtained this article from an old employee bulletin that he had and it caught my eye when glancing over it. I believe that the analysis on this topic could be discussed in a number of ways. One way would be in regards to elasticity. When a homeowner’s utilities are gas related, the need for gas is an inelastic product. Gas is needed in order to do a number of projects from heating their home, cooking their food, to drying their clothes. If this additional distribution cost takes place as well as the gas usage charges as well, it would be in the best benefit of the consumer to purchase the energy efficient product since they will be charged either way for the distribution.

Another aspect would be the supply and demand. The demand of gas is still needed, but due to the increasing cost of gas, there are many consumers that are switching to electric. When consumers do this, the demand of the gas will decreases. Supply is also a factor due to the economy and what is available.

In the long run, I do not believe that this thought for energy conservation will benefit all consumers. I think that the additional charges will cause people to change the way their home utilities from gas to electric, causing a demand decrease and causing possible unemployment with Veteran because of this. I think that if a consumer wants to become more energy conscious, they can purchase equipment that does this, but not through Veteran. I think there are too many factors that cause a negative influence with this being done.

References Shaw, D. (2008) Rewarding Conservation Northern, IN: Veteran Employee Bulletin.