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I may be naive, but it would seem more logical to charge consumers solely for the transmission and roll the price of production into that (rather than the other

by 7952 11y ago

I may be naive, but it would seem more logical to charge consumers solely for the transmission and roll the price of production into that (rather than the other way around). So that the rate you pay per kWh would depend on your proximity to where power is actually being generated on an hourly basis. If you are connected to a substation that is exporting power you would pay less than one that is importing. If energy costs are so dependant on location and distance why don't we actually acknowledge that in the pricing? If your city is not generating energy why should it pay the same price as one that is?

dpierce9 11y ago
In the US wholesale energy prices are locational and determined by three things: the cost of energy, congestion in the transmission network, and losses in delivery. Retail rates are also locational but principally determined by state-level organizations (Public Utility Commissions) who regulate the natural monopolies who control the distribution network in the state so they are unable to charge monopoly rents. Rate setting in most places is a very political process.