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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

#61

Post by renewiltord »

Aurornis wrote: post #46

The author estimates that electricity prices would be reduced by up to 33% (from $0.45 blended rate to $0.30), but PG&E’s profit margins are only 11%. That’s a good hint that this hypothetical is missing some important details The article hedges against someone pointing this out by admitting that Walnut Creek is an unusually optimistic location and that PG&E is also recognizing large expenses related to ongoing infra…

One of the things we find with cost-plus contracting is that the team providing the service somehow has a great deal of costs. Ironically, abandoning this approach leads to hiring higher margin businesses which nonetheless cost less. A confusing phenomenon when one doesn't account for the fact that people optimize to get more money ceteris paribus.

Re: Cities can cost effectively start their own utilities

#62

Post by rsync »

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…

Why use eminent domain to seize their garbage, crumbling infrastructure?

Instead, slowly build out, in parallel, the upgraded – which is to say, underground – infrastructure that PG&E refuses to build.

A community could do this opportunistically on a schedule that tracks the normal repaving of roads.

Re: Cities can cost effectively start their own utilities

#63

Post by [deleted] »

mindslight wrote: post #13
thatguy0900 wrote: post #6

Earlier quoted context omitted.

Long term I don't see how it's possible to continue to let people live in areas so fire prone that insurance cannot be done, it seems to me. Unless you want to live in a concrete castle or something

Construction itself isn't that expensive. It's certainly possible to self insure and accept that living in an area prone to fires means your house might burn down. It goes against the prevailing culture of the ever-growing housing bubble, but financialization has to hit its limits some time.

[deleted]

Re: Cities can cost effectively start their own utilities

#64

Post by arrosenberg »

trinsic2 wrote: post #24
thatguy0900 wrote: post #6

Earlier quoted context omitted.

Long term I don't see how it's possible to continue to let people live in areas so fire prone that insurance cannot be done, it seems to me. Unless you want to live in a concrete castle or something

You mean like a brick building? like how structures were originally built? Seems like a good idea to me for house to be made of stone in high fire related areas. Obviously the cost would be astronomical.

Brick buildings don't do well with earthquakes. California also happens to sit on a major, active fault line. While it is technically possible to make a brick or stone building earthquake-proof, I would imagine it's cost prohibitive for large scale single-family housing projects. Apartment towers are already built with a multistory steel-reinforced concrete base that is built to withstand earthquakes, but it would increase costs significantly to build to the top like that.

Re: Cities can cost effectively start their own utilities

#65

Post by flyinghamster »

There are a number of northern Illinois cities that have their own utility grids. Off the top of my head I can think of Naperville, Princeton, Rochelle, and Peru, with the last three having their own power plants.

Rochelle's municipal utility system also provides water and sewer, and fiber-optic internet. https://www.rmu.net/

Re: Cities can cost effectively start their own utilities

#66

Post by aquaticsunset »

jcarrano wrote: post #56

If PG&E could be undercut by 25%, then why are there no private companies doing it? Either it is not as profitable as the author claims, or PG&E's monopoly is due to state regulations (I don't know enough about the specifics) and it would be quite contradictory to demand the state solve the problems it created. Overall it reads like any other socialist argument for nationalizing (in this case "municipalizing") compan…

Municipal utilities exist everywhere. I'm not sure why you're being all hypothetical about it. They work well and for many reasons discussed here, sound like a good fit for Walnut Creek.

Re: Cities can cost effectively start their own utilities

#67

Post by AnotherGoodName »

Aurornis wrote: post #46

The author estimates that electricity prices would be reduced by up to 33% (from $0.45 blended rate to $0.30), but PG&E’s profit margins are only 11%. That’s a good hint that this hypothetical is missing some important details The article hedges against someone pointing this out by admitting that Walnut Creek is an unusually optimistic location and that PG&E is also recognizing large expenses related to ongoing infra…

Less than 20c per kWh for my local city power - https://www.cityofpaloalto.org/files/assets/public/v/5/utili...

About half the price of PG&E. This is in an otherwise PG&E area. People should be demanding their city handle power. It leads to half the price.

Re: Cities can cost effectively start their own utilities

#68

Post by coryrc »

mauvehaus wrote: post #51
mindslight wrote: post #13

Earlier quoted context omitted.

Construction itself isn't that expensive. It's certainly possible to self insure and accept that living in an area prone to fires means your house might burn down. It goes against the prevailing culture of the ever-growing housing bubble, but financialization has to hit its limits some time.

Self-insuring is probably not going to fly with your mortgage lender. If nobody can get a mortgage, and everyone has to self-insure, it's going to 1) drive down housing prices (fewer cash buyers) and 2) guarantee that only people of pretty substantial means can afford to live there (even with lower prices, most people can't come up with a cash payment for a house).

If prices were sane, anybody who bought a house ten years ago currently has enough equity to pay cash.

Re: Cities can cost effectively start their own utilities

#69

Post by jeffbee »

jncfhnb wrote: post #48
Aurornis wrote: post #46

The author estimates that electricity prices would be reduced by up to 33% (from $0.45 blended rate to $0.30), but PG&E’s profit margins are only 11%. That’s a good hint that this hypothetical is missing some important details The article hedges against someone pointing this out by admitting that Walnut Creek is an unusually optimistic location and that PG&E is also recognizing large expenses related to ongoing infra…

No, their argument is sound. It’s just missing the point of utilities. They’re saying that the cost of providing electricity to the cities, where everything is densely located and there are fewer trees and fewer overhead lines needing under grounding is lower so they should charge less to city consumers. They imply that the bulk of the cost is delivering power to the richer consumers further out because there’s a lot…

Maybe, but it's also clear that rural electrification was a huge error. People should live in clusters of at least a handful of structures where it's practical and affordable to provision electric lines (and telecommunications), or they should be off the grid altogether. What we built in the 20th century was the worst possible thing: mile after mile of transmission and distribution equipment serving dispersed houses in forests. This should never have been built and we should not perpetuate it with subsidies: https://www.google.com/maps/@38.4638277,-120.656418,3a,75y,3...

Re: Cities can cost effectively start their own utilities

#70

Post by coryrc »

ahmeneeroe-v2 wrote: post #29
avidiax wrote: post #25

Earlier quoted context omitted.

> It's not exactly fair to treat those rural residents as burdens to the urban areas when they provide the means for the urban areas to exist. There's a difference between people that are in farming/ranching and industry vs. people that are rural to afford a more lavish home in the woods or on the hills. Even still, a system that doesn't appropriately price and apportion risk will always be under pressure.

>a system that doesn't appropriately price and apportion risk will always be under pressure Very well stated, I am stealing this. Also in agreement with rural resource types vs rich rural. Again I think it is more complex than just apportioning power costs. CA effectively has a state policy of not maintaining its forest/rural land (ditto feds and their land). My parents live adjacent to national forest and have fire…

The forests are supposed to burn.

They mitigate by building fireproof homes and leaving when the fire comes. Or just not living there.

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