CFA Fights Against Anti-Fuel Standards Automakers
American automakers are fighting against a White House mandate that all domestically manufactured vehicles must meet a fuel standard of 56 miles per gallon or better by 2025. Automakers are reportedly buying up ad space and paying lobbyists to oppose the fuel standards, hoping to exempt light trucks and SUVs. However, consumer groups such as the Consumer Federation of America (CFA) and Consumers Union are launching their own campaign to prove that the automakers’ reasons for refuting the fuel standard are unfounded.
“This is the same shortsighted thinking that got the U.S. automakers in trouble in 2008 when gas prices caused them to be overloaded with gas guzzling SUV inventories that just wouldn’t sell,” said Jack Gillis of the CFA and author of The Car Book.
“In making their case, the car companies have trotted out the old fear campaigns that they’ve historically used to resist fuel economy and safety improvements over the years, claiming that automobiles will be more expensive, smaller and less safe and that consumers won’t buy them,” says Gillis. “Their fear-filled predictions have been proven wrong, time and time again. We heard that requiring airbags would add thousands to the cost of a car and consumers wouldn’t want them. We heard that publicizing crash test data was misleading, unfair and would not be understood by consumers. Well, today there is nary an ad that doesn’t tout the number of airbags or crash test performance.”
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The CFA and Consumers Union plan to use radio, print and online social media to spread the word about the reality of increasing fuel efficiency in American vehicles. According to the organizations, the fuel standard will:
1. Save consumers over $6,000 per vehicle in gasoline costs over the vehicle’s lifetime (compared to vehicles that meet the 2016 standard)
2. Double the fuel economy of new vehicles between 2008 and 2025
3. Cut gasoline consumption by one-third
4. Ensure U.S. car companies will be competitive in the U.S. and globally
5. Substantially reduce our dependence on foreign oil
6. Achieve widely accepted greenhouse gas reduction goals (40% by 2030)
7. Offset any increase in vehicle cost by immediate savings at the pump
8. Stimulate competition, keep costs down and promote product diversity
9. Ensure consumers will have vehicles they want (If they want SUVs they’ll have them, but much more fuel efficient versions)
10. Provide a long-term approach (14 years from now) which is both sensible, achievable, and allows for a gradual adjustment by automakers and consumers.
The consumer groups claim that if the automakers can convince the government not to enforce the fuel standards:
- Consumers will lose up to $50 billion in gas savings
- Gasoline consumption and oil imports will increase by hundreds of millions of barrels
- Auto sector employment will lose 50,000 jobs
- U.S. vehicles will be uncompetitive both in the U.S. and abroad
American automakers will need to listen to the consumer this time around in order to prevent another bailout situation as seen in 2008. It was the American taxpayer that kept these companies afloat, and now they want to refuse us more economical and fuel-efficient vehicles? Plus, by 2025 (13 years from now), engine efficiency technology will likely accelerate to the point where it’s hard to make a vehicle that gets less than 56 mpg anyway.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.