Ed Stasiak
buttociated with demand pricing of roads is the pricing policy for electricity. In some places, the pricing plan for electricity is set so the big users pay for both capital cost and operating cost and the small user pays only for operating cost or at most only a small portion of the capital cost. This pattern follows from GE's (??) marketing genius of electricity in Chicago.
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The capital charge is called demand charge. Usually based on the highest half hour usage in the previous eleven months. Demand charges are often higher than the energy charges for a large user.
One problem of demand pricing is that the large user pbuttes on the costs to those that buy their goods and services. A large building manager just increases rental. A smelter just raises the price of metal. In the process, adding on a handling fee. So the big users of electricity don't care about higher demand charges. Higher demand charges equate to more profit.
Big users get a break on demand charges by agreeing to dump electrical load in peak periods. Problem with this agreement is the peak hits and the user is asked to dump load. But then the user doesn't honor his agreement. The rice drier does not interupt his rice drying, but continues to use electricity. The electrical generator-distributor has to dump foundries and smelters. Then the generator-distributor has to pay huge penalties to the foundries and smelters to replace furnaces and ruined product. The rice drier could have shut down in an orderly fashion when first notified.
I expect something similar will happen on demand pricing of roads. Heavy users will agree to off peak use for lower prices and then find a way to put their vehicles on the road during peak.
Fuel taxes are set somewhat higher in the United States for diesel (about six cents a gallon Federal) and excise taxes on tires weighing over a base weight in order to collect more from heavy users who are not as likely to scream, since they can pbutt the costs on to their customers. Some truckers do have travelling ads on the back claiming to have paid thousands in fuel taxes. Just another way of saying why shipping costs are up.
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The further problem with trying to control demand with pricing policy is the trolls that come out of the woodwork and even get off their rest beds to cry that tolls won't work. Or the Transportation Boards and politicians that look on tolls as found money. Or the Congressman that consider ride-sharing on Shirley Highway in northern Virginia to be some type of crime.
