4 ms·

Can you please elaborate? Are you really saying that it isn't legal to be able to use one's data on usage intelligently? Don't utilities need to -- and do this

Can you please elaborate? Are you really saying that it isn't legal to be able to use one's data on usage intelligently? Don't utilities need to -- and do this -- anyway? Is it true internationally?

sophacles 17y ago
So my understanding is limited, and only applies to the US as far as i know, but it goes something like this: The power grid involves a few distinct parts -- generation, transmission, distribution. Distribution is the aspect most people ever deal with, its the "last mile" part. Generation is self explanitory, and transmission is the high voltage lines between the generators and the distribution. Some companies only do one aspect, some do 2 or all 3. The "deregulation" of the power market, was actually the creation a wholesale market of a commodity. This means that A generator operator in michigan can "sell" electricity to a utility in florida. In reality, the electrons never get transported that of course. The way the market works is -- Various generators place a bid on the market: x watts for y price/watt. An official, neutral party aggregates all the distribution loads, and does some fancy analysis, and puts out an official number -- how many watt of power the peak draw will be for that period. All bids are sorted, lowest price to highest price. Like this (very very fake nubmers): 5W $1/W 10W $2/W 3W $3/W In our example the peak draw is projected at 13W. Starting with the lowest bid and working up, the available power is used. in this case the first 2 bids. The highest bid under the line sets the price for power. So in this case power is sold at $2/W. This is the price for the whole market, it is what wholesale power costs to distribution companies for that period. The company that can provide 5W at $1/W makes a healthy profit. The expensive company doesnt make any money, their electricity is unused. The regulations keeping metering groups separate from the power market groups are there for market efficiency. First the generation only companies lose out. Second, if some companies had extra data, they could start playing with things, arranging for thier power bids to be raised/lowered in ways that are market inefficient. This enforces everyone to try to bid as low as possible to try to get their power sold at all. So to answer your question: no it sets up the stage for price gouging on the power market. the data is used intelligently for various long-term forecasting, efficency determinations, and for reporting to the markets, but the markets use the data intelligently for setting loads. Note, the data reported to the market by a utility is in effect statistical prediction, but the people who determine bid price for electricity never see this data. (people means algorithms here too). I'm pretty free-market, but these regulations make sense, in the same way that insider trading regulations make sense, and regulation against monopolistic competition. If it is not clear they are the same thing, it is more likely my explanation than the alternative.
- DaniFong 17y ago
  But, as I understand it, most energy markets in the US and internationally are not commodity markets: they're regulated monopolies, often with a certain regulated maximum rate of return. I would think that these monopolies can use the data that they themselves collect: they have to in order to plan and to supply the power to the grid on a cycle by cycle basis. Isn't this true? But even if it's not, I personally, along with other members of the public, can access historic clearing prices in several day and hour ahead markets (e.g. Midwest, Texas, etc.) Surely I'm allowed to use that data. And it seems to me that this is the important data -- unless one wanted to use metering data to do price discrimination, which the law already protects against. But even ignoring that... I don't know of any other such regulations on commodity markets. Can you think of any?
  - sophacles 17y ago
    The regulated monopolies are on the distribution end, not on the generation end. The generation end is hour- (and day-) ahead markets. The data in question -- metering data in this discussion, is enough to do price fixing. Those utilities with distribution divisions gain enough of an edge over those who don't to gouge consumers and go all monopolistic competition on thier competitors at the same time. Both of which are actions that break market efficiency. As for other commodity markets, im not super familiar with them, but I know in general price fixing and insider trading is illegal -- for good reason. Also an interesting observation on electricity is that it is far more "ideal" than a lot of commodities, in that there is absolutely no way to distinguish between generator A electricity and generator B electricity (unlike say... corn). There is also not nearly the consideration about movement involved -- Put it on the wire and the whole system adjusts accordingly (this is a physics thing more than a "good system" thing (mostly, but the system is good too)).

Can you please elaborate? Are you really saying that it isn't legal to be able to use one's data on usage intelligently? Don't utilities need to -- and do this -- anyway? Is it true internationally?

sophacles 17y ago

So my understanding is limited, and only applies to the US as far as i know, but it goes something like this: The power grid involves a few distinct parts -- generation, transmission, distribution. Distribution is the aspect most people ever deal with, its the "last mile" part. Generation is self explanitory, and transmission is the high voltage lines between the generators and the distribution. Some companies only do one aspect, some do 2 or all 3. The "deregulation" of the power market, was actually the creation a wholesale market of a commodity. This means that A generator operator in michigan can "sell" electricity to a utility in florida. In reality, the electrons never get transported that of course. The way the market works is -- Various generators place a bid on the market: x watts for y price/watt. An official, neutral party aggregates all the distribution loads, and does some fancy analysis, and puts out an official number -- how many watt of power the peak draw will be for that period. All bids are sorted, lowest price to highest price. Like this (very very fake nubmers): 5W $1/W 10W $2/W 3W $3/W In our example the peak draw is projected at 13W. Starting with the lowest bid and working up, the available power is used. in this case the first 2 bids. The highest bid under the line sets the price for power. So in this case power is sold at $2/W. This is the price for the whole market, it is what wholesale power costs to distribution companies for that period. The company that can provide 5W at $1/W makes a healthy profit. The expensive company doesnt make any money, their electricity is unused. The regulations keeping metering groups separate from the power market groups are there for market efficiency. First the generation only companies lose out. Second, if some companies had extra data, they could start playing with things, arranging for thier power bids to be raised/lowered in ways that are market inefficient. This enforces everyone to try to bid as low as possible to try to get their power sold at all. So to answer your question: no it sets up the stage for price gouging on the power market. the data is used intelligently for various long-term forecasting, efficency determinations, and for reporting to the markets, but the markets use the data intelligently for setting loads. Note, the data reported to the market by a utility is in effect statistical prediction, but the people who determine bid price for electricity never see this data. (people means algorithms here too). I'm pretty free-market, but these regulations make sense, in the same way that insider trading regulations make sense, and regulation against monopolistic competition. If it is not clear they are the same thing, it is more likely my explanation than the alternative.

DaniFong 17y ago
But, as I understand it, most energy markets in the US and internationally are not commodity markets: they're regulated monopolies, often with a certain regulated maximum rate of return. I would think that these monopolies can use the data that they themselves collect: they have to in order to plan and to supply the power to the grid on a cycle by cycle basis. Isn't this true? But even if it's not, I personally, along with other members of the public, can access historic clearing prices in several day and hour ahead markets (e.g. Midwest, Texas, etc.) Surely I'm allowed to use that data. And it seems to me that this is the important data -- unless one wanted to use metering data to do price discrimination, which the law already protects against. But even ignoring that... I don't know of any other such regulations on commodity markets. Can you think of any?
- sophacles 17y ago
  The regulated monopolies are on the distribution end, not on the generation end. The generation end is hour- (and day-) ahead markets. The data in question -- metering data in this discussion, is enough to do price fixing. Those utilities with distribution divisions gain enough of an edge over those who don't to gouge consumers and go all monopolistic competition on thier competitors at the same time. Both of which are actions that break market efficiency. As for other commodity markets, im not super familiar with them, but I know in general price fixing and insider trading is illegal -- for good reason. Also an interesting observation on electricity is that it is far more "ideal" than a lot of commodities, in that there is absolutely no way to distinguish between generator A electricity and generator B electricity (unlike say... corn). There is also not nearly the consideration about movement involved -- Put it on the wire and the whole system adjusts accordingly (this is a physics thing more than a "good system" thing (mostly, but the system is good too)).