Shouldn't the people who use the resource more pay more for its maintenance and upkeep? Seems silly to force everyone to equally maintain a resource that not everyone equally utilizes.
How should net metering affect your electric bill?
61–70 of 332 posts
Re: How should net metering affect your electric bill?
#62I'm not sure where to start with this article. Ok, how about here: there is no necessary connection between costs and prices, at all, and this is why some businesses go broke and others are worth a trillion dollars. Starting completely over with the basic microeconomics correct, there's surely an interesting question about public utilities which are paying prices for electricity which no longer line up with amortizat…
But isn't the idea of a "utility" that it operates as a unique type of company that prices its services in sync with costs? In fact many utilities are explicitly cooperatives.
To me, "privatized utility" is an oxymoron and that point is just a company with a mandated or de facto monopoly.
Re: How should net metering affect your electric bill?
#63This piece doesn't go nearly far enough.
Blue pill: prices are economic signals reflecting supply and demand and play five distinct roles in capitalist economies...
Red pill: prices are a statement of relative power between and among interacting entities that occasionally take economic factors into consideration, but only occasionally.
Subsidy irrationality and many other artifacts mentioned in this piece that are difficult to reconcile in a blue pill world make complete sense in a red pill world.
Re: How should net metering affect your electric bill?
#64“In practice, it’s often politically difficult to argue for overt subsidies, and we resort to workarounds like net metering.“ The reason we have so many hidden subsidies (also: tax credits) is precisely the sentence above. It’s the difference between policy and politics. Few policies are designed well because the main force driving their creation is political support (or the lack of it).
"carbon tax" is trouble to enact because you can't expect to rally support for something with the word tax in its name Then people complain about where will that tax money go. It doesn't matter. The government could burn all the carbon tax money collected (& in fact, this would help against inflation) . The purpose is to fix incentives, not find funding
Giving the carbon tax revenue back to people as cash payments could help politically.
Re: How should net metering affect your electric bill?
#65In NYC at least, electric supply charges are distinct line items from electric delivery charges. Consumers do have the option of choosing who supplies their electricity (e.g. namely if you want to buy your electricity from a green source). But the local monopoly is always entitled to charge you for the service of actually delivering said electricity to you. Both charges fluctuate from month to month. When I still liv…
It's the same in California. The problem is that the delivery charges are also calculated per kWh (so, the cost of delivering a single unit of electricity to your house). But what happens when the net electricity delivered is zero? You could argue that customers should be charged for both the electricity delivered to their house and the electricity taken away from their house, since they are using the grid and other…
Thanks, this is the detail I was missing. Net billing for delivery makes zero sense. I think the reasonable solution is to bill the consumption direction only.
Re: How should net metering affect your electric bill?
#66I'm not sure I even understand what the point of this substack article is and it is oversimplified. Is it him just examining what net-metering is then realizing that the utility provides more value than just electricity generation and that is eye opening to him?
There's no conclusion and no cohesive argument just that the world is full of pricing distortions or that what you pay in prices isn't always exactly what you get (subsidizing some other development). Is it a take that NEM is flawed?
Is it him moralizing that the climate tech industry is taking advantage of subsidies? "Don't cling to a subsidy longer and harder than necessary" --> Please look at the on-going subsidies to Oil & Gas - its absurd.
If you really want to understand electricity generation pricing you should start looking at all the pricing nodes in real time and bring in energy storage, capacity payments, spinning reserves, non-spinning reserves, day ahead market, 5 minute market etc. On top of that you should start layering in how the federal government subsidizes different energy industries and add that layer on top of it. It's incredibly complex and certainly not clear what you are paying for.
The top layer of how retail get's comped for the generation (in California) is interesting and a long-term risk for the utility (if enough people/companies put solar on roof and use NEM) if solar generation truly takes off. Long way to go as someone who works in the industry.
Re: How should net metering affect your electric bill?
#67The problem with Net Metering is that some politicians don't understand how electricity (and energy) works, but feel like they need to "do something" in order to tackle climate change.
Net Metering was a great way to subsidize solar when it was a niche market. Now it's not. IMO, we should stop subsidizing solar and start subsidizing home batteries. IE, only allow "Net Metering" if there is a battery, sized to match the panels, that the power company can control.
This way, we can make the system "win-win." The consumer benefits from cheaper electricity, and the power company benefits because they can tap the generated electricity when it's needed most.
Re: How should net metering affect your electric bill?
#68Earlier quoted context omitted.
"carbon tax" is trouble to enact because you can't expect to rally support for something with the word tax in its name Then people complain about where will that tax money go. It doesn't matter. The government could burn all the carbon tax money collected (& in fact, this would help against inflation) . The purpose is to fix incentives, not find funding
Not only is the "tax" word problematic, but if you call it "carbon pricing" that irks the people who are reflexively anti-market. And no matter what you call it, the sanctimonious environmentalists will fight it because it minimizes the need for heroic personal sacrifice with respect to preserving the environment (frankly, these personal sacrifices probably aren't significant in the first place--the bulk of pollution…
Environmentalists would absolutely not fight it. They've been begging for a carbon tax for 40 years.
Re: How should net metering affect your electric bill?
#69Really, in deregulated markets, a similar concept should apply to wind/solar generators. They should be forced to guarantee 100% reliable production, which means that they are responsible for the batteries or gas plants as well. Then they won't get to financially destabilize the reliable power producers by shifting the costs of having a plant sitting around idle for most of the year to some other org that has to bala…
In a deregulated market, no one forces anyone to guarantee anything.
Re: How should net metering affect your electric bill?
#70Right, the claim that renewables are cheaper than nuclear and other alternatives are a half-truth.
It's true that renewables can be highly affordable when the sun is shining but when the wind is blowing but the reason why they work with the current grid is that natural gas is highly available and cheap and the capital cost of gas turbine generators (very similar to jet aircraft engines) is very low.
Hydroelectric can fill some of the gap but at an environmental expense: if you want to support a healthy ecosystem you need a relatively continuous flow in rivers. If it is starting and stopping a lot you are depriving the ecosystem of a valuable service.
The idea that consumers can match demand and supply is also limited in applicability. If you turn off power to an industrial facility like a microchip factory you can destroy days if not months worth of production. Wholesale electricity prices can range from negative to astronomical and it is outright cruel and unrealistic to expect ordinary consumers to be exposed to that.
Options for power storage have improved dramatically in the last decade thanks to the development of electric car batteries but they are still orders of magnitude too expensive. If they follow the same curve solar has they could come within reach but with any setbacks they could remain science fiction.