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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

#331

Post by gottorf »

JCharante wrote: post #256
UncleEntity wrote: post #89

Earlier quoted context omitted.

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.

> Sure, PG&E implodes but then who manages Diablo Canyon and who delivers electricity to the unprofitable rural areas? Hopefully no one manages them and that forces residents to move out and stop being a drain on society.

I assume the same should apply to, say, USPS, and the residents of Alaska and Hawaii should stop being leeches who can get letters delivered to them below cost?

Re: Cities can cost effectively start their own utilities

#332

Post by ugh123 »

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…

>but it was a very poor decision that I have to believe they regret

Unfortunately, I'm sure the folks that signed that deal were long gone before the problems started setting in

Re: Cities can cost effectively start their own utilities

#333

Post by gottorf »

teknopaul wrote: post #295

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 bey…

The average American utility company nets around 10% return on equity, IIRC. 30-year Treasury bonds can be had today around 4.6%, with none of the risk or headaches of operating a business. Hardly a bastion of profitability.

I agree residential electric infrastructure in the US is not nearly as good as it could be. Buried power lines in suburban environments alone could probably cut outage numbers at least by half; but as one of the first countries in the world to electrify, doing that is a lot more expensive than in developing countries. Sometimes there is such a thing as a first-mover disadvantage!

Re: Cities can cost effectively start their own utilities

#334

Post by jeffbee »

b112 wrote: post #212
jeffbee wrote: post #131

Earlier quoted context omitted.

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 ever…

Quebec is 4x as large as California, has far more forested land, and is often very dry in late summer. It also has massive snowstorms, ice storms, which bring down vegetation, and ranges from -40F up to 100F yearly, depending. We can nitpick on specifics, but by no means is California more rural, or more forested. Quebec is also far less populous, and has a far more hostile environment. Hydro Quebec does well, becaus…

> Quebec is also far less populous

Isn't this my point? It is practical to punch transmission lines through any place. It is much more difficult, risky, and costly to maintain a fractal distribution network to individual customers in certain places due to geography and climate. If you parachute randomly into Quebec you'd be walking for a month before you met anyone. Same is not true in California.

Re: Cities can cost effectively start their own utilities

#335

Post by r0m4n0 »

Not only am I getting a 14c rate with smud but smud is ask really active in the community. They donate $1000s to my neighborhood association and local maker space. Also a friend is mine wanted 3 phase power ad was researching what it would take.

Smud was very helpful and had a simple process while PGE wanted proof of business usage amongst other stuff (heard this all second hand though)

Re: Cities can cost effectively start their own utilities

#336

Post by kelseyfrog »

gottorf wrote: post #331
JCharante wrote: post #256

Earlier quoted context omitted.

> Sure, PG&E implodes but then who manages Diablo Canyon and who delivers electricity to the unprofitable rural areas? Hopefully no one manages them and that forces residents to move out and stop being a drain on society.

I assume the same should apply to, say, USPS, and the residents of Alaska and Hawaii should stop being leeches who can get letters delivered to them below cost?

If you prioritize ideological consistency over pragmatics, sure. I don't; I just want a fair system for electrical services.

Re: Cities can cost effectively start their own utilities

#337

Post by kkkqkqkqkqlqlql »

chasd00 wrote: post #83
bitmasher9 wrote: post #50

This is absolutely a no-brainer for municipalities. The private companies are charging a premium that they return to shareholders and give to executives. Municipalities have excellent access to credit at rates significantly lower than the premium charged by utility companies. The residents get cheaper access and more influence in how the utility is ran. The number of people that pay for-profit companies for natural g…

City municipalities aren’t exactly staffed with the sharpest knives in the drawer. Few have the ability to manage the basics of street maintenance let alone stand something up like a utility. A fool and their money are soon separated, color me skeptical.

> City municipalities aren’t exactly staffed with the sharpest knives in the drawer

And private utility companies are?

Re: Cities can cost effectively start their own utilities

#339

Post by AnthonyMouse »

econ wrote: post #224
ksec wrote: post #192

Earlier quoted context omitted.

>In this ideology the sale would be viewed as a success regardless of any practical downsides. In other places on earth, selling public utility requires the company to operate at similar or better level of services previously provided while retaining the cost. And those deals are mostly regulated, penalties when not meeting them. And it used to be, may be in rare cases the people in Government making those deals actu…

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

> I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times.

You can straightforwardly privatize things that can't be allowed to fail. Power generation is a decent example: If you have a hundred independent generating companies that all sell into a live auction market, they have to compete with each other which keeps prices down and the market as a whole remains reliable because there are many independent suppliers using different generation methods and if any one of them experiences a failure you can immediately switch to the others. The market has the incentive to be able to supply even during grid stress because the price will go up then, so suppliers with reserve capacity make back their costs for keeping it in reserve.

The problem comes when there is corruption. Instead of having a competitive market, the contract is assigned to cronies, or a lack of antitrust enforcement allows the market to consolidate until the suppliers are a cartel. Then, since competition is thing that gives privatization its advantage, the lack of competition causes the public to get screwed.

Re: Cities can cost effectively start their own utilities

#340

Post by rsynnott »

maxerickson wrote: post #303
rsynnott wrote: post #302

Earlier quoted context omitted.

Who paid for the infra, and how old is it? If it was inherited from a prior larger utility, this is the sort of thing you can get away with, for a while, until it needs serious maintenance. But ultimately spreading the true lifetime cost of electrical infrastructure over that sort of population density without subsidy is going to lead to absurdly high prices.

It formed from smaller utilities ~1950. We have harsh winters and some small thunderstorms, but that's about it for weather. Looks like people end up paying close to $0.30 per kwh. There's probably some cross subsidies coming from the state, I don't know.

Yeah, I’d be _amazed_ if that isn’t subsidised in some way, whether via direct subsidy or risk equalisation fees from bigger utilities.
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