Utilities consider imposing a retail surcharge to fund clean-tech R&D.
When OPEC boycotted the United States in October 1973, the resulting energy crisis rocked America’s economy. Among the many consequences of that crisis, American industries and consumers began burning more natural gas instead of oil. Consequently gas prices doubled, tripled and then quadrupled over the decade from 1974 to 1983.
In the midst of the energy crisis, the American Gas Association (AGA) assembled a coalition of gas utilities, pipeline companies, gas producers and political leaders to address a fundamental problem—namely, the industry was spending too little on research and development (R&D) into technologies that would improve efficiencies all along the value chain, from gas well to water heater. R&D funding suffered because regulators in many states wouldn’t allow pipelines and utility companies to recoup research costs in retail rates, and unregulated gas producers had little incentive to invest in research that would benefit their competitors.