Suppose that Octopus Power is considering providing a weatherization service to about a quarter of its customers

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Suppose that Octopus Power is considering providing a weatherization service to about a quarter of its customers ‘‘free of charge.’’ Why? Because, by reducing energy demand, it will be able to avoid building a new power plant. However, since there is no such thing as a free lunch, the utility will pay for the weatherization by charging higher electricity rates for all its customers. Is the weatherization subsidy a good idea?

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