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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

#291

Post by rsynnott »

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…

The trouble is, if you end the subsidisation overnight, you have a big, big problem.

Re: Cities can cost effectively start their own utilities

#292

Post by hgomersall »

Arrath wrote: post #284
mindslight wrote: post #189

Earlier quoted context omitted.

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.

Isn't part of the problem assuming that there is a single global optimum? It seems there are at least two, such as in the case of utilities: best services or best profits for the shareholders. Again in the case of utilities we see time and again that these are mutually exclusive optimums as a privatized utility makes cuts to investment, build out, maintenance, customer service, or other aspects of the business in the…

It's hard to argue that as a society we should construct systems that have any goal that isn't optimising (in this example) services. If that aligns with maximising profits for shareholders, then great, if not then the system is not working as it needs to. IMO it's never really about free markets per se, but about competition. If the market is not delivering effective competition, then it should be made to do so. Competition is what aligns shareholder interest with customer interest.

Re: Cities can cost effectively start their own utilities

#293

Post by rsynnott »

Gigachad wrote: post #260
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.

Is this a problem though? Utilities will become more expensive for rural properties, but if those people are producing product that people need, they can just slightly bump prices to cover their electricity costs, which the consumers can cover with their new found savings on utilities. The real benefit is that the people who don't have any reason to actually be rural, say remote software developers, will now have to…

Thing is, it wouldn’t be _slightly_. If you’re a power company who just does rural customers, you’re probably going to be looking at charging rates so high that people simply can’t pay them.

Re: Cities can cost effectively start their own utilities

#294

Post by rsynnott »

simoncion wrote: post #251
locallost wrote: post #247

Earlier quoted context omitted.

I can't see it, even with heating, as it's California. Even at something outrageous like $1 per kwh it's ~1000 kwh per month (I suppose PG&E takes some fixed costs like everyone else in the world). For comparison we're a family of four and just got our final bill for 2024, we were at 1500kwh for the whole year (more or less the same for years now). Even yours is weird. I don't have a desktop computer running but we c…

> [My family of four] were at 1500kwh for the whole year... Weird. Looking at my past several bills, my monthly usage is fairly constant; ~450kWh per month. So, (if my math is correct) that puts my annual usage at ~5400kWh. > I can't see it, even with heating, as it's California. I've no idea where OP is, but there are inland parts of the state that get dangerously hot in the summer. Cooling could be a big concern. P…

> Weird. Looking at my past several bills, my monthly usage is fairly constant; ~450kWh per month. So, (if my math is correct) that puts my annual usage at ~5400kWh.

That’s really quite a lot if you don’t have electric heating and cooling. It’d be worth trying to figure out where it’s going.

Re: Cities can cost effectively start their own utilities

#295

Post by teknopaul »

Profit creaming, not good for county even if it seems good in the city.

Everytime there is a natural disaster in the US the press report xxxx houses without power. US leccy firms pride the bear minimum service, always. Profit comes first. Delivery second priority at best.

This doesn't ofter happen in Europe because they dont profit cream and builds reliable redundant grid for almost everone. The grid even extends beyond countries boundaries, with neighbouring countries supporting each other.

Some folk out in the sticks, who you might think don't matter, provide useful services to the city folk. Eg farmers.

I.e. Cost the grid not the city.

You probably are being ripped off in the US, but that's a different story to the one being told imho.

Careful what you wish for.

Re: Cities can cost effectively start their own utilities

#296

Post by _heimdall »

MichaelZuo wrote: post #287
_heimdall wrote: post #217

Earlier quoted context omitted.

Well to be clear, my question there was more broad than any one company's financial statements. I was asking a general question of the motivation for large corporations to avoid having profits on paper. I asked the question rather than claiming it as a statement because I am less confident in the details and want to raise the issue without presuming that I know exactly what I'm talking about on the topic.

The same applies to every public company’s financial statements…? That is assuming you’ve taken the effort to read the filings. If your lookkng for easy generalizations that applies to all public companies then no it doesn’t exist. You have to put in the effort to read each individual statement.

Feel free to not respond if you don't think my question was interesting enough to answer, or if you think I can do the research.

Its worth noting that reading financials still doesn't make me an expert in the area and I'd still be making a mistake to assume that means I understand well enough the games or motivations behind the numbers on a page.

Re: Cities can cost effectively start their own utilities

#297

Post by maxerickson »

pclmulqdq wrote: post #162
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…

It sounds like your city was overprovisioned in terms of how much electricity they could supply, and you had the benefit of the cheapest power around (hydroelectric power is very cheap), so when you got plugged into the wider network that the power company was servicing, you got screwed. There's a good chance that power for neighboring towns got cheaper and/or more reliable after the deal given what happened with you…

One potential reason I can come up with is the dam aging and becoming a liability.

The town may also have been putting other revenues towards the electric utility (so losing money on the service and billing).

It was probably just a mistake though.

My town charges about $0.11 per kwh, with a fixed monthly service fee making the effective rate for a small user closer to $0.20.

Re: Cities can cost effectively start their own utilities

#298

Post by maxerickson »

rsynnott wrote: post #290
kevinburke wrote: post #177

Earlier quoted context omitted.

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.

The problem is, if cities don’t pay for that, who will? Just abandoning electricity for rural areas isn’t _really_ an option, but it would likely be uneconomic without the effective subsidy from urban areas.

The area I live in has utilities that service the small town population centers and a utility that services most of the outlying rural area. The rural operator is expensive, but not unaffordable.

Density including the towns is about 3.2 people per square km.

Re: Cities can cost effectively start their own utilities

#299

Post by gvkhna »

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.

Unfortunately most of the CPUC worked at PGE, the people that understand energy regulation are usually energy folks. And so the CPUC is typically quite understanding of PG&E’s pleas, they approved every single rate hike they’ve proposed. 5 times last year alone.

Re: Cities can cost effectively start their own utilities

#300

Post by imchillyb »

Electric, Water, Sewer are modern necessities.

Our governments should provide these services to Citizens at no cost to them.

We already pay for the maintenance costs and infrastructure is already built out.

Charge the companies for the services, and give them to the populace.

But, but, but, that's socialism! Taxes are socialism. Take from the many, use that spending power to benefit the people.

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