THE GREAT GRINDING conference on the energy legislation has now worked out a compromise - an astonishingly good one - on electric utility rates. It's a hopeful omen for the even more difficult choices on price controls and oil policy that still lie ahead. There seems to be a tendency to portray the electric-rate solution as a defeat for President Carter. Certainly the conference's version differs fundamentally from the original Carter proposal that the House passed, not to mention the nonproposal that the Senate wrote. But, to everybody's surprise, the conference has now produced a bill that is clearly preferable to either.
The target here is a structure of power rates that is still generally designed to encourage people to use more of it. These rates were sealed into law in the decades, not far behind us, when energy seemed endless and utilities took it for granted that they would always make money by selling more of it. For the nation, the result is waste of precious fuel. For the utilities, it has come to mean a pattern of highly irregular demand, low at night but rising to sudden peaks - at sundown on a winter day, for example, or in midafternoon during a July heat wave.
Maintaining the capacity to meet that occasional demand is proving very expensive for both the power companies and their customers. The President's energy plan seeks, altogether correctly, to encourage conservation and to change rates to smooth out the surges in the load. The President asked Congress to impose a set of federal rules on the states' regulatory commissions, prohibiting most of the present volume discounts and requiring rates to rise during peak periods of the day and year.
When the House passed the bill, the utilities descended in force on the Senate to protest vehemently that the new requirements would prove unmanageably complex and uncertain. They had a point. Nobody has had much experience with this kind of power rate, and it's difficult to predict how effective it will prove. A number of experiments are now getting under way. Pepco has installed time-of-day meters (they cost $1,000 apiece) on 200 of its largest commercial customers and is now waiting for the Public Service Commission's permission to begin charging higher rates during the peak hours. Vepco is preparing to install similar meters for 9,000 residential customers. It's also planning similar rates for some customers - volunteers - whose water heaters would be cut off during peak hours by a signal automatically transmitted over the power line. But it's not yet clear what will work best.
It's too early to impose uniform federal rules on all rate structures. Here it makes great good sense to use the states as 50 laboratories to test different approaches. The conference was right to leave final decisions to the states - but it was certainly also right to provide a goad. The compromise bill provides that each state's utility regulators must hold hearings to consider specific steps toward rate reform and conservation. The Department of Energy is authorized to attend those state hearings and press the national interest.
The national interest here is beyond dispute. Consumption of electricity this year is more than 5 per cent over last year's. The country can't afford to sustain that rate of increase for long. Of all the fuels used to generate power in this county, the consumption of oil has been rising most rapidly.
The energy conference is not just a game, to be scored in pluses and minuses for the White House. The utility-rate solution takes Mr. Carter where he wanted to go, and that's what counts. It also disencumbers the conference of one more heavily lobbied quarrel, permitting it to proceed now to the even more important issues of the pricing and taxing of gas and oil.