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Subsidising energy prices for local consumers based on export revenues is widely practiced but is bad policy. The utilities should charge market rates for consu
by JamisonM 8y ago
Subsidising energy prices for local consumers based on export revenues is widely practiced but is bad policy. The utilities should charge market rates for consumption and cut local rate-payers a cheque annually using a scheme that encourages energy saving practices.
- CPLX 8y agoIt's not necessarily bad policy it's just policy. The local residents are also the ones that generally live with the consequences and externalities of the local power generation industry.
- rdl 8y agoThey should get a check independent of consumption to pay for those externalities.
- JamisonM 8y agoLow-cosumption residents are then forced to live with the externalities of the generation infrastructure as well as the externalities of the behaviour induced by the electricity subsidy while benefiting the least from the subsidy - it seems like a pretty bad policy.
- dahdum 8y agoIf it’s a public municipal utility, any dividend in lieu of price reductions, should go to the local government, not the individual residents. The local government could then issue out checks to everyone if they want, but more likely it would go towards general budget and benefit everyone.
- JamisonM 8y agoI wouldn't be fussy about the rebate mechanism but funding a government based on energy prices can also be a tricky business - but even a poorly managed local government subsidised by energy exports is far better than local energy consumption subsidised by energy exports.
- dahdum 8y agoYes, nonzero chance they'd sell off the revenue stream for pennies on the dollar to some private financiers to stopgap irresponsible deficit spending. See Chicago for an incredible example of this: https://chicago.suntimes.com/news/parking-meters-garages-took-in-156m-but-city-wont-see-a-cent/ https://chicago.suntimes.com/news/parking-meters-garages-too...
- ldayley 8y agoCrypro-miners are taking advantage of the same asymmetries that the FAANG data centers enjoy. They were built in those same areas of WA/OR for the same reasons. They just don’t use as much power as mining rigs...
- therealdrag0 8y agoThey also are less volatile and have steady growth and long-term contractual commitments, that the article mentioned the utilities seeking.
- vkou 8y agoWhy shouldn't people who live in an area receive a dividend from the resource wealth of that area? Property owners in cities receive similar dividends all the time, in the form of rising property prices.
- walshemj 8y agoWhy should people who are lucky to live near a hydro plant get cheaper power than some one who doesn't should it not be shared across the nation
- tlb 8y agoTransmitting power over long distances is capital-intensive. A gigawatt transmission line costs on the order of $2M / mile. So if you put your gigawatt factory 500 miles away from the generator, the utility has to spend $1B on installing wires. They price lower near the plant to reflect their costs, and encourage energy-intensive industries to locate nearby.
- vkou 8y agoBecause there's a cost in money and efficiency to transmitting power across large distances. It's the same reason for why groceries in Alaska are more expensive then groceries in Florida.
- dahdum 8y agoThe local government should decide this, and they will almost always keep this dividend for their general fund.