Electricity providers have to recoup the fixed costs of providing the network and the variable costs of power generation in order to survive. Billing structure is always an approximation of the highly volatile reality. As consumption reduces due to higher charges or increased efficiency (or environmental awareness), the fixed costs that were amortised by the old consumption rates become a larger proportion of the cost base, whether reflected as a connection charge, or included as part of the $/kwh charges. If they move the costs to the connection charge, people are immediately incentivised to go off-grid but not to reduce consumption if they stay on grid. Result, fewer consumers. If they leave fixed charges as part of the $/kwh charges, the higher unit charges incentivise people to reduce consumption (or partly generate their own), leaving the fixed costs as an ever larger proportion. Either way, it's a death spiral as eventually even the subsidised fixed cost is no-longer worth it for the consumer and more go "off-grid" as a rational response. This sheds more fixed costs onto the still-connected and the cycle repeats. It's a death spiral that should be allowed to happen, but the risk is that the poorest people are stuck until the end, paying ludicrous rates for power, as the rich move off-grid first.