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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

#261

Post by Gare »

hiAndrewQuinn wrote: post #258
rmason wrote: post #86

I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the big power company in the state would try and get the city to sell them the utility. After I moved a city council for whatever reason ended up selling. As a result the cost of electricity immediately doubled and power outages occurred regularly due to reduced maint…

I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about…

> These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does.

It has to be noted that in most EU countries electricity for business is quite cheaper than for households.

https://ec.europa.eu/eurostat/statistics-explained/index.php...

Re: Cities can cost effectively start their own utilities

#262

Post by cinntaile »

zmgsabst wrote: post #234
krallja wrote: post #210

Earlier quoted context omitted.

Californians blame it all on Enron, but that can't be the only reason, right?

The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.

20-30 years is 1 generation.

Re: Cities can cost effectively start their own utilities

#263

Post by hiAndrewQuinn »

Gare wrote: post #261
hiAndrewQuinn wrote: post #258

Earlier quoted context omitted.

I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about…

> These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does. It has to be noted that in most EU countries electricity for business is quite cheaper than for households. https://ec.europa.eu/eurostat/statistics-explained/index.php...

Correct, but this doesn't create as much of a wedge as you might suspect. It's also true in the US that commercial electricity tends to be 20-50% cheaper than the home delivered stuff. In the EU the additional tax burden means the difference is usually closer to 40-70%. Ironically, in this way, you could describe the EU as being far more business-friendly than the United States (by dint of being much more consumer-hostile, but hey).

Making the fundamental power generation cheaper is probably still the best lever a private actor can push.

Re: Cities can cost effectively start their own utilities

#264

Post by ahoef »

cinntaile wrote: post #262
zmgsabst wrote: post #234

Earlier quoted context omitted.

The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.

20-30 years is 1 generation.

There are genetic generations and cultural generations. I think they mean the cultural generations.

Re: Cities can cost effectively start their own utilities

#265

Post by nicbou »

kevinburke wrote: post #209
nocoiner wrote: post #188

Earlier quoted context omitted.

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.

Not just rural areas but places like Orinda and the Berkeley Hills where I will pay to underground lines at massive expense. There is also a huge moral hazard problem where we make it cheaper than it should be to live in fire zones by subsidizing electricity and insurance. So people build a lot of houses in fire territory that burn down. In the meantime we make it more expensive to live in the safe places. We should…

This is very close to the arguments Strong Towns make in favour of denser neighbourhoods.

https://www.youtube.com/watch?v=7Nw6qyyrTeI

Re: Cities can cost effectively start their own utilities

#266

Post by wreckdropibex »

hiAndrewQuinn wrote: post #258
rmason wrote: post #86

I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the big power company in the state would try and get the city to sell them the utility. After I moved a city council for whatever reason ended up selling. As a result the cost of electricity immediately doubled and power outages occurred regularly due to reduced maint…

I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about…

> the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about 25% higher

Huh? More like 11-17c/kWh.

- Average spot price for 2024 was less than 6c/kwh https://www.nodesk.fi/sahkon-keskihinta-2024/

- Transmission costs are around 2-6c/kwh https://sahkokuningas.fi/sahkon-siirtohinta/

- Taxes bit less than 3c/kWh

Even if you add all those up, you only get max 15c/kWh.

As of today, you can get 2 year fixed price for less than 8c/kWh, even with that it only adds up to 17c/kWh, with most expensive transmission costs, taxes rounded up and energy price rounded up.

Nuclear energy has contributed to the cheap price, but so has wind power https://www.talouselama.fi/uutiset/te/bfe4f5f4-0329-4cfe-989...

Re: Cities can cost effectively start their own utilities

#267

Post by ksec »

philjohn wrote: post #253
econ wrote: post #224

Earlier quoted context omitted.

I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng

Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last…

It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out.

Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps.

[1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions

https://www.thinkbroadband.com/news/10528-exclusive-january-...

Re: Cities can cost effectively start their own utilities

#268

Post by hiAndrewQuinn »

wreckdropibex wrote: post #266
hiAndrewQuinn wrote: post #258

Earlier quoted context omitted.

I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about…

> the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about 25% higher Huh? More like 11-17c/kWh. - Average spot price for 2024 was less than 6c/kwh https://www.nodesk.fi/sahkon-keskihinta-2024/ - Transmission costs are around 2-6c/kwh https://sahkokuningas.fi/sahkon-siirtohinta/ - Taxes bit less than 3c/kWh Even if you add all those up, you o…

https://countryeconomy.com/energy-and-environment/electricit... is where I'm pulling most of my data from, which itself seems to be using Eurostat as a source.

Re: Cities can cost effectively start their own utilities

#269

Post by mschuster91 »

zmgsabst wrote: post #234
krallja wrote: post #210

Earlier quoted context omitted.

Californians blame it all on Enron, but that can't be the only reason, right?

The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.

The thing is, large scandals can have an aftereffect that lasts for decades.

Berlin for example had a massive bank collapse in 2001 under the Conservative government that ended up placing the state of Berlin into billions of euros worth of debt and financial risk. The succeeding SD/Left/Green triplet coalitions had to fire-sell off many state-held assets like the water utility (that ended up a disaster on its own [2]) and especially a huge amount of residential real estate, which is now contributing to the insane rent explosions in Berlin.

To this day, Berlin hasn't recovered from all the penny-pinching of the last decades.

[1] https://de.wikipedia.org/wiki/Berliner_Bankenskandal

[2] https://de.wikipedia.org/wiki/Berliner_Wasserbetriebe#Streit...

Re: Cities can cost effectively start their own utilities

#270

Post by wesselbindt »

treyd wrote: post #139
Ekaros wrote: post #108

Earlier quoted context omitted.

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.

I can't speak for the parent post of course, but what I think they might mean is this: social democracy eventually devolves into neoliberalism (or worse), which, as you rightly point out, is geared towards making life much, much worse for the many to the benefit of a shrinking few.

To see some examples of this, look at the arguably social democratic Keynesian US from the fifties, and where they're at now. Similarly for the United Kingdom. Labour used to fight for social democratic policies, and since the advent of "New Labour" (Thatcher's greatest victory), they're essentially a right wing party. For a much more harrowing example, look at Allende in Chile and the US sponsored coup by Pinochet.

In general what you see is that the social democratic status of a state is an unstable one. Roughly speaking, the people who would benefit from neoliberal policies happen to have a lot of money with which they can and do influence politics. There's campaign funds, lobbying, but much more importantly owning the media[1]. Propaganda is incredibly powerful (we are not immune), and it has been used successfully time and again to get people to vote against their own interests, such as abolishing social democratic practices.

[1] In the case of Chile, and for example Indonesia, the mechanism is much more violent, but the principle the same. Capital is spent to successfully influence politics in favor of capital.

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