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Cities can cost effectively start their own utilities

kevin.burke.dev

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Re: Cities can cost effectively start their own utilities

#31

Post by aidenn0 »

ahmeneeroe-v2 wrote: post #28
yumraj wrote: post #21

Earlier quoted context omitted.

As the blog also mentioned, Santa Clara city charges 17c while in the neighboring San Jose I pay average 50c (time of use plan). Half of 50c even if I believe you is 25c still higher than 17c.

Don't believe me, just research your bill.

I paid an average of $0.31 per kWh last month with SCE (which is on the low side, because a lot of that is charging my car, which I have setup to only charge during off-peak). I see under $0.06 per kWh of Non Bypassable Charges. The word "tax" does not appear on the bill, except in a notice about raising rates which mentions a loss (with the word "after-tax" appended to the amount of the loss) incurred by SCE.

Re: Cities can cost effectively start their own utilities

#32

Post by yumraj »

ahmeneeroe-v2 wrote: post #28
yumraj wrote: post #21

Earlier quoted context omitted.

As the blog also mentioned, Santa Clara city charges 17c while in the neighboring San Jose I pay average 50c (time of use plan). Half of 50c even if I believe you is 25c still higher than 17c.

Don't believe me, just research your bill.

I’m saying San Jose PGE is more than half what Santa Clara pays.

So even if half is tax, it’s still a lot more. And, half of Santa Clara’s would also be tax.

Re: Cities can cost effectively start their own utilities

#33

Post by marssaxman »

CobaltFire wrote: post #5
kevinburke wrote: post #4

Earlier quoted context omitted.

PG&E already went bankrupt recently, and taking over the whole state wouldn't really help very much. The problem is largely liability rules that make it very expensive to provide power to wildfire zones and rural areas. PG&E and the state have decided to pay for that by charging people who live in cities very high rates for electricity. It's perverse that people who live in safe, urban areas are subsidizing people wh…

I bang this drum all the time, but you are the first other person I've seen state it online. If we stop subsidizing the foothills by creating urban utility districts it would solve the PG&E problem. We would have a new problem of causing a ton of people to be unable to continue living in those areas without some kind of off-grid program. Long term I think this is the only sane way forward though.

> a ton of people to be unable to continue living in those areas

That sounds like more of a solution than a problem: those places are going to burn, so it's better that people stop living there.

Re: Cities can cost effectively start their own utilities

#34

Post by brian-armstrong »

kevinburke wrote: post #15
abeppu wrote: post #12

The author mentions the cost of buying out the distribution network, and cites SF's failed attempt to do this. The author tries to figure out the price for Walnut Creek's grid based on inflation and population -- but the $2.5B figure this is based off was rejected by PG&E. The messed up thing is PG&E as a monopoly can set the price wherever they like -- and they can demand substantial continuing payments to connect t…

Yes, the fact that PG&E rejected the offer is why I adjusted the figure for Walnut Creek's population and then increased it by 50%. The fact is muni borrowing is cheap - even if PG&E charged $1 billion we could finance that for about six cents per kilowatt hour. I don't think the CPUC will let them get away with "we won't sell at any price" - I think the regulators would force them to sell at some price.

PG&E surely knows that if it lets one city do this, then more will follow quickly. It will be left with the least profitable regions and cities that can't afford to/don't have the credit for this transition. That would ultimately leave the remaining customers in an even less affordable position.

Re: Cities can cost effectively start their own utilities

#35

Post by lotsofpulp »

xrd wrote: post #18

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycom…

I don’t see anything in State Farm’s history that indicates Berkshire Hathaway had anything to do with the company. It has always been a mutual insurance company, owned by its policyholders.

Re: Cities can cost effectively start their own utilities

#36

Post by xrd »

lotsofpulp wrote: post #35
xrd wrote: post #18

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycom…

I don’t see anything in State Farm’s history that indicates Berkshire Hathaway had anything to do with the company. It has always been a mutual insurance company, owned by its policyholders.

You are right. I'm confusing State Farm with Allstate, via McKinsey (I'm reading the book "When McKinsey comes to town"). Berkshire Hathaway owns Geico and has taken a similar path, however. But, this Oregon utility has BH ownership.

Re: Cities can cost effectively start their own utilities

#37

Post by xrd »

1970-01-01 wrote: post #23
xrd wrote: post #18

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycom…

>>they are also undertaking a massive project to underground utility lines in fire-prone areas. Seems like they're actively trying to fix it.

I'm glad you stated that. It certainly wasn't my takeaway of the way they handled it, however. By my reading it seems like the local officials begged them to turn off the lines when they saw what was coming. And, that the executives at the utility didn't take action and then denied that this meeting occurred seems damning to the people who lost everything.

Re: Cities can cost effectively start their own utilities

#38

Post by dragonwriter »

xrd wrote: post #18

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycom…

None of the things you list are former public utilities of any kind, much less the specific kind under discussion (California public utility districts providing electricity and similar services.) PacifiCorp is a private utility company like PGE, formed from the merger of other (then- troubled), also private, utilities in 1910, and the other things aren't even utilities.

Are there any germane examples of your “These formerly ‘public utilities’ are now often owned by PE or Berkshire Hathaway” claim or is it just a complete non-sequitur?

Re: Cities can cost effectively start their own utilities

#39

Post by xrd »

dragonwriter wrote: post #38
xrd wrote: post #18

These formerly "public utilities" are now often owned by PE or Berkshire Hathaway. Whenever I see the folky wisdom of Charlie Munger or Warren Buffer posted on HN, I can't help but think about their firm's work in transforming State Farm insurance, GEICO and this gem I posted earlier today on HN: "PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection." https://news.ycom…

None of the things you list are former public utilities of any kind, much less the specific kind under discussion (California public utility districts providing electricity and similar services.) PacifiCorp is a private utility company like PGE, formed from the merger of other (then- troubled), also private, utilities in 1910, and the other things aren't even utilities. Are there any germane examples of your “These f…

I do think you make valid points and I'm wrong about the way I categorized them.

And, I did put public in quotes because these utilities, while privately owned, do benefit from regulatory capture that seems out of place with a privately held company. And they often operate on or over public lands.

And, having lived through the fires in Oregon and seeing the trauma first hand, I'm still angry.

That's my takeaway from the article but I'm willing to listen and learn. Your points are valid and show how mistaken some (or all) of my conclusions are based on false connections.

Re: Cities can cost effectively start their own utilities

#40

Post by rufus_foreman »

rangestransform wrote: post #3

Can the CA govt just impose prohibitive fire prevention liabilities on utility companies, bankrupt them, and scoop up the assets for free?

>> Can the CA govt just impose prohibitive fire prevention liabilities on utility companies, bankrupt them, and scoop up the assets for free

I don't think so. Not currently.

"nor shall private property be taken for public use, without just compensation"

That's federal law. Supposedly, that applies to the states through the Fourteenth Amendment. All of the sudden, once the Fourteenth Amendment is passed, the Constitution applies to state governments, not just the federal government.

So if that's the case, no. You can't just "scoop up the assets for free" because you can't take private property for public use without compensation. I'm kinda a little bit suspicious that it makes sense to interpret the Fourteenth Amendment that way. Sounds like a power grab. If you want to try and turn that around, I know just the guys to do it.

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