We received this in our Madison Hours email and wanted to share the concept. This is a new system that uses potential energy as a non-inflationary store of value.

You may be interested to learn about Kilowatt Cards - gift cards that pay for 10 kilowatt-hours (kWh) of electricity in any residential utility account, anywhere in the world. They demonstrate fixed-value paper. Electric utilities don't accept them - we do, thorough www.kilowattcards.com - and then send payments directly to the power companies, at the rate they normally charge their residential customers for that exact amount of electricity (including taxes and fees).

Because energy is needed to produce or to use nearly all goods and services today, the ability to consume energy is a meaningful definition of wealth. While some people want gold and silver, everybody needs heat or light or transportation. And since 10 kWh is a physical constant the cards have fixed-value. They are supported by a non-profit corporation I founded to help people pay for electricity anywhere in the world.

One can judge intuitively what each Kilowatt Card is worth: 10 kWh = 10,000 Watt-hours; enough to run a 100 Watt light bulb for 100 hours (exaclty) and roughly enough to drive a Toyota Prius for 25 miles. If this system remains sound, Kilowatt Cards will provide a non-inflating store of value, worth the same amount of scientific work, regardless of electricity prices in money. In principle Kilowatt Cards can also be used for barter and as a medium of exchange because they can be redeemed for residential electricity by any holder, regardless of local prices.

Economist Joseph Stiglitz has spoken about the past failures of the gold standard and the coming failure of the "dollar standard," speculating that all national currencies may eventually fail due to inflation, and be replaced by private money from competing companies, backed by gold and their reputations. However the gold standard is impractical since there isn't enough gold for six billion people and its value is mainly esthetic. But here is an alternative to gold: electricity.

While the price of electricity in dollars is not stable, its value to people as a source of light, heat and motion is very stable. If one likes to read at night or travel by train these activities always consume about the same amounts of electricity. So no matter what its price in dollars, electricity always has about the same value to individuals. One ought to be able to save that which has value to people.

The idea of backing scrip with kilowatt-hours has been discussed since the 1980's but was not considered practical because any given power grid could be destroyed, or unable to obtain fuel. (www.smallisbeautiful.org) However, the delocalized nature of KilowattCards.com shows how that problem has been solved.

I think the social impacts could be positive because having a fixed and objective store-of-value allows people to save without loosing wealth to inflation. The ability to save a non-depreciating asset that is less expensive than real estate could reduce the pressures for suburban sprawl. It might even curb the modern drive to consume everything available as quickly as possible in the name of "growth," since inflation takes value away from anything not growing fast enough.

One of our goals is to show that paper notes can be backed by something useful at low cost to the system. We do not create, protect or deliver any electricity - we just pay for it with national currencies. Kilowatt Cards cannot be copied, even though they are printed on plain paper, because value resides in the serial number and the coupon. Before accepting them in trade, anyone with access to kilowattcards.com can "authenticate" the serial numbers in a process that replaces the existing numbers with new ones. This way they can be traded to anyone and authenticated by anyone without limit.

We are developing this technology with an open-source approach so that others might also issue kilowatt-hour notes. Kilowatt Cards are presently being given away as gift cards so they will not be confused with financial securities or private currency. However, other notes could possibly be registered with financial authorities and sold as securities. Once they become familiar, such products could be issued by any reputable organization, especially regional power companies and governments.

You can obtain Kilowatt Cards just by asking for them at kilowattcards.org

Regards,
Robert Hahl