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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

#341

Post by korhojoa »

hiAndrewQuinn wrote: post #268
wreckdropibex wrote: post #266

Earlier quoted context omitted.

> 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.

Maybe this is a "including everything" proce, i.e. transmission, connection fees, etc.

I currently pay a flat ~8c/kWh. I could save by using spot price electricity but as I don't use much, this keeps the monthly cost predictable.

Re: Cities can cost effectively start their own utilities

#342

Post by AnthonyMouse »

philjohn wrote: post #255
darreninthenet wrote: post #239

Earlier quoted context omitted.

Depends how you do it... in the UK we have the underlying infrastructure government owned and we choose who to buy our electricity and gas from.

For electric and gas that works as it's all just accounting. Energy company A buys futures for has and electricity and it all gets provided via the grid. For trains it's much harder - yes, there are two providers on the WCML, but they're not equal (one runs faster trains) and as such there's zero real competition.

These things are a choice though. The natural monopoly isn't the trains, it's the tracks. And it's not maintenance of the tracks, it's ownership of them.

So you have the government own the tracks, contract with a private company to maintain them. Then anyone can use the tracks, like anyone can use the roads. Private companies offer train service to the public. All they need is rolling stock and they can start selling tickets. You then get a market that looks like airlines, i.e. entering the market is a moderate investment (millions; buy rolling stock/planes) rather than needing billions to build the network itself. More popular routes get more suppliers, which turns into more frequent service. There is plenty of competition because rolling stock is mobile and can easily be reassigned according to customer demand.

Re: Cities can cost effectively start their own utilities

#343

Post by J_Shelby_J »

ty6853 wrote: post #187
sgarland wrote: post #161

Earlier quoted context omitted.

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…

Aren’t you making the case for the OP? That it cost so much to extend a line for a thousand feet… how about the thousands of miles of lines it takes to service rural users?

The same is true for all infrastructure in that it gets less expensive per user as density increases. The cost to hook up an apartment building to the grid is a few houses in a suburb but services 10x the people at the same revenue per person. The cost to service a single home in a rural area might wipe the revenue out from a dozen apartments.

Frankly, I’m sick of subsidizing the rural welfare crowd. Let them pay the market price for their roads and utilities if they want to cosplay as Galt gulchers.

Re: Cities can cost effectively start their own utilities

#344

Post by ty6853 »

J_Shelby_J wrote: post #343
ty6853 wrote: post #187

Earlier quoted context omitted.

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…

Aren’t you making the case for the OP? That it cost so much to extend a line for a thousand feet… how about the thousands of miles of lines it takes to service rural users? The same is true for all infrastructure in that it gets less expensive per user as density increases. The cost to hook up an apartment building to the grid is a few houses in a suburb but services 10x the people at the same revenue per person. The…

Yes we have no public roads either for miles. Privately maintained easements instead. I built mine first with just an axe and shovels, later with a backhoe. Sewer is private septic. Water we had to dig a private well. The electric coop is paid for by users at full cost by their own extensions.

This works amazing as taxes and subsidies are basically zero. You pay for what you use.

Re: Cities can cost effectively start their own utilities

#345

Post by marcosdumay »

sgarland wrote: post #305
lostlogin wrote: post #182

Earlier quoted context omitted.

> 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 20…

I don’t see how voting works as an analogy. Suburbs would be more apt. I live in one, but I’ll be the first to admit that there’s no defensible reason to do so beyond “I want to.” They’re typically a net negative for counties in terms of tax revenue, they perpetuate car-first infrastructure, they contribute to high housing costs, and they don’t produce anything of value, like rural areas can (farms, land preservation…

Well, people have to live somewhere, and that place will not generate a lot of revenue.

US suburbs have problems due to single-use areas and forced low density. But you will aleays have some area that don't pay a lot of taxes.

Re: Cities can cost effectively start their own utilities

#346

Post by HPsquared »

Der_Einzige wrote: post #329
andy_ppp wrote: post #271

Earlier quoted context omitted.

You can extrapolate this to why governments all over the world are effectively bankrupt, if you have no assets and instead rent them back from the rich it's extremely difficult to balance your books and the tax burden will go up forever. No amount of cost cutting will restore all public assets being owned by someone else and rented back at ever increasing costs. https://www.youtube.com/watch?v=II1GOhoNpms

The only governments which are not "bankrupt" are shitholes like Russia (and they only did it to prevent sanctions from harming their economy). A healthy debt to GDP ratio (like what the USA has) is integral for a growing economy. Choke on it Austrians.

There's also Norway, China etc, countries with productive SOEs. Those governments have debt but also significant assets.

Re: Cities can cost effectively start their own utilities

#348

Post by jt2190 »

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…

Why can’t you tell us the name of the town?

Re: Cities can cost effectively start their own utilities

#349

Post by AnthonyMouse »

Empact wrote: post #326
animal_spirits wrote: post #147

Earlier quoted context omitted.

I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to com…

Services subject to natural monopolies are good candidates for being run cooperatively, by / on behalf of the market participants, so that there is not the incentive to extract rents via market power. Government-run may be practical from e.g. a fundraising perspective, but these services could be run wholly privately as co-ops.

In theory having the government run it should have the same effect. In practice what happens is that voters don't separately elect the utility's board and then the mayor gets elected on the basis of some school or tax issues and allows the government-run utility to become wasteful or corrupt.

What could be interesting is to have the local government found a co-op, i.e. they issue a bond to do the build-out and then hand the network to a co-op in exchange for a contract to pay the debt, essentially giving the co-op the backing of the government's credit rating for the initial build-out. Then the co-op board gets separately elected by its customers so they're directly accountable to the customers for any shenanigans.

Re: Cities can cost effectively start their own utilities

#350

Post by arccy »

kelseyfrog wrote: post #323
xerox13ster wrote: post #276

Earlier quoted context omitted.

Suburbia is subsidizing nothing. They are a drain on the urban core of every single city. There is not enough density in a suburban land area to even reclaim the taxes required to build the infrastructure to get there. And we stupidly continue to build new suburban development for new tax bases that don’t even reclaim the cost of building them. Then there’s no money to maintain them. Urban development subsidizes ever…

I hate suburbs as much as the next person, but let's be realistic. Just because I hate them doesn't mean they aren't subsidizing rural power transmission - that would be letting emotions get in the way of rationalism.

they might be subsidized less than the rural areas, but they're still subsidized by the urban core.
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