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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

#131

Post by jeffbee »

b112 wrote: post #123
jeffbee wrote: post #107

Earlier quoted context omitted.

None of the people in the area to which I referred are undertaking anything productive. Food comes from farms, like always.

Which are in rural areas. Which means the lines have to go there. Which means they pass less rural area to get there. Rural areas aren't just a farm all by itself. Farmers need schools, stores, supplies, workers, you know, rural areas. As well, when we electrified our nations, most people lived on farms. At the start of the 20th, as an example, most Canadians lived in rural areas. The reverse is now true. This conver…

Out of context Canadians are ... out of context. We are discussing utilities in California. California and Quebec could not be more different in terms of climate and fire risk. I can't wait for you to justify the claim that fire risk is the same in California and Quebec. Every place in Quebec can generally expect precipitation every other day on average and the normal number of consecutive dry days in California every year would shatter the same record in Quebec.

Re: Cities can cost effectively start their own utilities

#132

Post by llamaimperative »

aqueueaqueue wrote: post #88
llamaimperative wrote: post #76

Earlier quoted context omitted.

Land Value Tax solves this

How so?

It incentivizes greater development of already-developed land (meaning less infrastructure serving more people) rather than acquisition and low-yield development of new (more rural) land.

Re: Cities can cost effectively start their own utilities

#133

Post by necubi »

Aurornis wrote: post #127
colechristensen wrote: post #47

Earlier quoted context omitted.

>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 PG&E customers are paying very large amounts for the consequences of bad infrastructure causing wildfires and other legal costs which are being paid for with higher rates. Example: https://www…

Right, but that’s my point: You can’t assume these costs disappear if the government takes over. They just get blended into the tax bill.

He’s talking about local governments in places that have little or no fire risk. Should people living in dense cities be paying to underground power lines to rural communities hundreds of miles away?

Re: Cities can cost effectively start their own utilities

#134

Post by vlovich123 »

abathur wrote: post #118
jf wrote: post #93

Earlier quoted context omitted.

The highest price that the city owned electric utility in Alameda, CA charges on the standard rate schedule is $0.29453 / kWh https://www.alamedamp.com/DocumentCenter/View/1268/FY25-Rate... Edit: Oh, this utility runs at a profit and has for decades. The profits have been going into undergrounding transmission lines

Not trying to neg how you phrased it, but I wonder if the whole damn system would be a smidge better if we had strong well-worn widely-used terms to discriminate between profit-taken and surplus-reinvested (and maybe to further discriminate between unrelated r&d, related r&d, and direct performance/capacity/resiliency/etc. investments)

Can you distinguish effective investment from ineffective? For example, paying competitively to attract and retain talent can be seen as an investment as well. And before you restrict it to just physical infrastructure investment, a non-trivial part of the cost of that infrastructure is in salaries and also how you manage everything at scale and I would think you’d want to incentivize more efficiency there too. This is why the tax code gets so insanely complicated.

Re: Cities can cost effectively start their own utilities

#135

Post by vlovich123 »

Aurornis wrote: post #73
AnotherGoodName wrote: post #67

Earlier quoted context omitted.

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.

> People should be demanding their city handle power. It leads to half the price. My power is significantly cheaper than yours but it comes from a private company. Picking random cities doesn’t tell us anything at all about costs or efficiency. Different areas have different costs and expenses. You have to compare apples to apples.

What city in the Bay Area is that out of curiosity?

Re: Cities can cost effectively start their own utilities

#137

Post by ceejayoz »

asats wrote: post #122
darth_avocado wrote: post #110

Earlier quoted context omitted.

Profit margins are low because they need to pay $20M in opex for the CEO’s bonus.

If I'm not mistaken that's 0.08% of their revenue.

He won’t be the only person getting a bonus. Or a fancy office conference table. Or offsite team building exercises in Hawaii.

Re: Cities can cost effectively start their own utilities

#138

Post by abathur »

vlovich123 wrote: post #134
abathur wrote: post #118

Earlier quoted context omitted.

Not trying to neg how you phrased it, but I wonder if the whole damn system would be a smidge better if we had strong well-worn widely-used terms to discriminate between profit-taken and surplus-reinvested (and maybe to further discriminate between unrelated r&d, related r&d, and direct performance/capacity/resiliency/etc. investments)

Can you distinguish effective investment from ineffective? For example, paying competitively to attract and retain talent can be seen as an investment as well. And before you restrict it to just physical infrastructure investment, a non-trivial part of the cost of that infrastructure is in salaries and also how you manage everything at scale and I would think you’d want to incentivize more efficiency there too. This…

I'm a little unsure how to take you here, because I avoided dragging the efficacy of an investment into frame on purpose.

Maybe you just mean to tack on the idea that we could benefit from having better language to separate shrewd and incompetent investments, in which case I'm ~fine with some language to retcon the difference between merely lighting investments on fire and using them to drive an engine back on to those investments once we know the difference.

But if you mean to suggest that it's pointless for us to bother discriminating between profit-taken and investment-(effective|ineffective) just because we don't know whether the cat is dead or alive yet, then I suspect I disagree to the death.

(Edit: In case I'm being obtuse, I at least think I agree that "investing" surplus in hiring and retaining great employees is a surplus-invested, and not a profit-taken.)

Re: Cities can cost effectively start their own utilities

#139

Post by treyd »

Ekaros wrote: post #108
tmnvix wrote: post #105

Earlier quoted context omitted.

Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political economy is almost entirely focused on ensuring that everything that can be sold to private entities (read, the market) is. In this ideology the sale would be viewed as a success regardless of any practical downsides.

I think this is just the end-stage failures of social democracies. Fund the things now, even if it means selling anything that can generate slight profits in long term. Or provide basic services at reasonable rates. Eventually everything is sold and out sourced, money has been wasted on buying votes and the debt is maxed out. Then the system will fail...

It's the end state of neoliberal policies. That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.

Re: Cities can cost effectively start their own utilities

#140

Post by roenxi »

Aurornis wrote: post #77
shiftpgdn wrote: post #60

Earlier quoted context omitted.

What is PG&Es generation cost vs administrative and legal overhead? The 11% margin isn't a good basis number. How is other states like Texas or Colorado are delivering at 10-12c/kwh ? I do agree with your sentiment that city bureaucrats may be tempted to raid the energy business to pay for pet projects and other things. This can be protected against by segmenting the energy business into its own protected organizatio…

> What is PG&Es generation cost vs administrative and legal overhead? The 11% margin isn't a good basis number. Administrative and legal costs don’t disappear when the city runs it, so why does it matter? When the city runs a utility, nearly all of the costs associated with running a utility still exist. If your mental model of a city-owned utility is that they’re going to generate power and sell it at cost with no a…

The basic argument on Texas seems to be: "Texas avoided 75% of the costs in California by doing everything differently. California can't learn anything from them because they do things differently". That seems like a weak argument. California would have to do things quite differently to get a 75% cost reduction.

It is stereotyping, but it sounds like the sort of state that has a strong regulatory regime that would be quite controlling about what people can actually do. I note the irony that when Texas had a power outage everyone wanted much more regulation to force changes to grid maintenance, but when California spends 4x as much and PG&E skips on grid maintenance everyone throws their hands up because they can't call for more regulation and are out of ideas. The regulation doesn't seem to have dodged the maintenance problems but I'd bet it drives the cost up.

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