Using California as an example, the Purdue University shows how the joy of getting rid of the burden called oil price may soon fade away, should the use of a tiered electricity pricing system continue.
In California, this system means that users who consume electricity above a certain amount will pay more for what they use. Using a three-rate tier system, California charges progressively more money for the electricity you use.
Wally Tyner, a Professor of Agricultural Economics, believes this means that Californians will end up paying the highest price in the US for electricity. Or, in figures we can all understand, 14.42 cents per kilowatt hour, or 35 percent above the national average.
"The objective of a tiered pricing system is to discourage consumption. It's meant to get you to think about turning off your lights and conserving electricity. In California, the unintended consequence is that plug-in hybrid cars won't be economical under this system," said Tyner according to Purdue.
To back his findings, Tyner says that adding a plug-in hybrid like the Volt to your garage would increase the amount of electricity used in your household by 60 percent. This would make, ironically, the Chevrolet Volt less economical than the hybrid king Toyota Prius. How much so?
"People who view the Volt as green will pay $10,000 more over the lifetime of the car because it's green," Tyner added. "Most consumers will look at the numbers and won't pay that."
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