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The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing.

The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing. As distributed generation increases, regulations will have to change to reflect the fact that the cost of the distribution does not go away. I wonder what the best pricing structure is for the future.

selectodude 9y ago
Literally half my bill is distribution charges.
- martinald 9y ago
  Yes, not sure what GP is meaning here. My bill is about 30% 'standing charge' which is a daily rate you pay regardless of energy consumption, which would be for distribution costs.
- unreal37 9y ago
  Same here. The cost of electricity and the cost of distribution are two separate charges here, and they are about the same.
kerkeslager 9y ago
> The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing. This isn't true; not only is distribution included in pricing, but there are three major components in pricing (generation, transmission, distribution) and you've completely omitted one.
- Dylan16807 9y ago
  The difference between "transmission" and "distribution" is just an arbitrary cutoff at a certain voltage? I think it's fair to combine them, then.
  - kerkeslager 9y ago
    Engineering-wise, I think that makes sense (I'm not sure, I was never involved in the engineering side of things when I worked at an RTO, I was involved in the financials software). However, legally/economically there are big differences between distribution and transmission, and if we're talking about cost, it doesn't make any sense to bunch these into one as if they have the same cost structure. If anything, transmission and generation have more similarities in the way they're priced (at least as of a decade ago when I worked in that industry).
jnwatson 9y ago
Distribution and power usage are two different line items on a typical electric bill. Whether those accurately reflect the balance in cost is a different matter.

selectodude 9y ago

Literally half my bill is distribution charges.

martinald 9y ago
Yes, not sure what GP is meaning here. My bill is about 30% 'standing charge' which is a daily rate you pay regardless of energy consumption, which would be for distribution costs.
unreal37 9y ago
Same here. The cost of electricity and the cost of distribution are two separate charges here, and they are about the same.

kerkeslager 9y ago

> The pricing structure that is currently baked into power bills assumes that the cost of generation is paramount, and that the cost of distribution is nothing. This isn't true; not only is distribution included in pricing, but there are three major components in pricing (generation, transmission, distribution) and you've completely omitted one.

Dylan16807 9y ago
The difference between "transmission" and "distribution" is just an arbitrary cutoff at a certain voltage? I think it's fair to combine them, then.
- kerkeslager 9y ago
  Engineering-wise, I think that makes sense (I'm not sure, I was never involved in the engineering side of things when I worked at an RTO, I was involved in the financials software). However, legally/economically there are big differences between distribution and transmission, and if we're talking about cost, it doesn't make any sense to bunch these into one as if they have the same cost structure. If anything, transmission and generation have more similarities in the way they're priced (at least as of a decade ago when I worked in that industry).

jnwatson 9y ago

Distribution and power usage are two different line items on a typical electric bill. Whether those accurately reflect the balance in cost is a different matter.