Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Cities can cost effectively start their own utilities

kevin.burke.dev

Post reply on HN
Print view View original

181–190 of 411 posts

Re: Cities can cost effectively start their own utilities

#181

Post by kevinburke »

UncleEntity wrote: post #89
kelseyfrog wrote: post #84

Of course it's cost effective for cities to start their own utilities, the economies of scale work in favor of urban and suburban electrification and maintenance. What isn't effective is electrification and maintenance of low density regions although power monopolies like PG&E are required to provide service. The urban and suburban customers are effectively subsidizing the cost of transmission and maintenance for rur…

Sure, PG&E implodes but then who manages Diablo Canyon and who delivers electricity to the unprofitable rural areas? I left California last century but seem to recall the PUC(?) has a pretty tight reign on what PG&E does and doesn't do.

The flip side of this is that more and more homes are being built in fire zones in large part because we subsidize development in fire zones. It's a bad problem because of bad incentives. We should incentivize urban living

Re: Cities can cost effectively start their own utilities

#182

Post by lostlogin »

sgarland wrote: post #161
jeffbee wrote: post #69

Earlier quoted context omitted.

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…

This has to be the most confidently incorrect take I’ve ever read here. The Rural Electrification Act not only brought power to rural areas, but also jobs to Americans when they were most needed, and countless follow-on benefits: increased farm productivity, longer lifespans and higher quality of life, etc. It’s also not that subsidized compared to many other industries; the entire point of co-ops is purchasing somet…

> This has to be the most confidently incorrect take I’ve ever read here.

It’s funnier if we alter it a little, is it more or less true this way?

>> It's also clear that rural voting was a huge error. People should live in clusters of at least a handful of structures where it's practical and affordable to provision government (and telecommunications), or they should be off the grid altogether. What we built in the 20th century was the worst possible thing: dispersed houses. This should never have been built and we should not perpetuate it with subsidies.

Re: Cities can cost effectively start their own utilities

#183

Post by [deleted] »

colechristensen wrote: post #47
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…

>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…

[deleted]

Re: Cities can cost effectively start their own utilities

#184

Post by ryao »

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…

The author addressed that discrepancy:

  PG&E's current rate structure has urban rate payers subsidize rural rate payers and people who live in wildfire zones in e.g. the Orinda Hills, who need substantial investment in order to receive power without sparking wildfires. This is bad policy - instead of subsidizing fire zones, it should be cheap to live in safe places and more expensive to live in dangerous places. Lower cost of electricity would reverse these trends.

Re: Cities can cost effectively start their own utilities

#186

Post by xethos »

jf wrote: post #93
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…

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

> Oh, this utility runs at a profit and has for decades

And yet somehow Americans will never see this and think "If only it were government-owned so the profit could be returned to the people"

Re: Cities can cost effectively start their own utilities

#187

Post by ty6853 »

sgarland wrote: post #161
jeffbee wrote: post #69

Earlier quoted context omitted.

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…

This has to be the most confidently incorrect take I’ve ever read here. The Rural Electrification Act not only brought power to rural areas, but also jobs to Americans when they were most needed, and countless follow-on benefits: increased farm productivity, longer lifespans and higher quality of life, etc. It’s also not that subsidized compared to many other industries; the entire point of co-ops is purchasing somet…

Its hilarious city folks think rural power is subsidized.

I recently extended a line about 1000 feet. For this, I paid $13000 -- primary transmission, poles, anchors, electricians, transformers, all at full rates. And it was a required donation, as in the power coop owns everything and it goes on public easement on to the next guy when they extend from mine. When they finished, I worked myself silly digging secondary transmission to where I was used on the property.

It is the other way around, rural people shoulder the costs of massive mileage of the grid extension that aid intercity networking. The costs are privatized but the benefits are socialized.

Re: Cities can cost effectively start their own utilities

#188

Post by nocoiner »

kevinburke wrote: post #177
theptip wrote: post #130

Earlier quoted context omitted.

> 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%. This is addressed right at the beginning of the article. The argument is not that PG&E is skimming off huge profits, rather that it is structurally inefficient: > Distribution: How much to get the power from your local substation to your house over local power lines. In PG&E's rate chart, they charge 20…

I'm the author here. The cost savings come from not having people who live in cities pay for undergrounding lines and maintaining power lines in rural areas. Maintaining the city networks is much cheaper. This is why Santa Clara, Palo Alto and Alameda's power companies can deliver power for half of what PG&E can. You can just copy their cost structure.

Cool. Now you’ve just undone 70 years of rural electrification in the United States.

Optimizing for factors other than universal service is completely valid, but I’m guessing each of those municipal power systems pre-dated rural electrification and thereby get to somewhat free ride on the system more than anyone would reasonably allow Walnut Creek to do in the year 2025.

Re: Cities can cost effectively start their own utilities

#189

Post by mindslight »

wisty wrote: post #160
treyd wrote: post #139

Earlier quoted context omitted.

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.

Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better. The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local mi…

You're still assuming that free markets will find the global optimum, which is equivalent to asserting P=NP and shrouding it in no true Scotsman.

Re: Cities can cost effectively start their own utilities

#190

Post by jncfhnb »

jltsiren wrote: post #174
jncfhnb wrote: post #148

Earlier quoted context omitted.

Using tax money to subsidize higher rates on certain areas is roughly the same as just charging people all a slightly higher rate. “The people” in expensive areas have literally no agency in finding an efficient solution. They don’t have any say about the utilities grid investments. In most parts of the country “these people” are also poorer.

Economic efficiency comes from accurate pricing. If grid power is artificially expensive in urban areas, people will install solar panels and batteries in situations where it doesn't really make sense. And if grid power is artificially cheap in rural areas, people will not install solar panels and batteries in situations where it makes sense. Thus incorrect pricing leads to inefficient investments. Many economists ev…

Economic efficiency gains from specific power pricing are vastly undermined by the huge positive externalities of having electricity.

Solar panel and battery investments reduce your demand for power from the grid, and in many rate cases will reduce your energy bill, but they _won’t_ reduce the costs of maintaining the distribution grid assets connecting you to the grid that need to exist even if you only use them 0.1% of the time. People with solar panels are the worst offenders as they can end up paying nothing, or perhaps even net receive money, despite still requiring investment from the utility.

Accurate pricing of power is very very difficult. Whose energy should cost more? The 10k residents with 5 miles of overhead lines being undergrounded this year? Or the 1k with 15 miles of overhead lines that won’t be under grounded for 5 years? Are you prepared to impose a $50M capital investment cost solely on the consumers that use it? Uh oh. Turns out customers oppose an huge hike in their energy bills and are demanding you DONT underground their lines. Are you going to charge consumers extra because a car ran into a pole that’s specifically on their feeder? The risks of something like a forest fire affect everyone, even if it’s on a line that serves just one person.

This stuff is very complicated. The elephant in the room is that under grounding distribution networks in places like California is simply far too expensive for the kind of budgets they have.

Post reply on HN