3 ms·

This all makes sense, but why then is the "standard" (coal-fired?) electricity the same price as the "renewable" electricity? Why does the utility "waive" the d

by bdamm 8y ago

This all makes sense, but why then is the "standard" (coal-fired?) electricity the same price as the "renewable" electricity? Why does the utility "waive" the distribution fee? In fact, passing it on to the consumer as an option doesn't make any sense to me. The utility negotiates bulk price and averages it out for consumers. If anything the conversation with the utility should be entirely about matching behavior to supply and/or dynamic pricing, and not at all about renewable vs non-renewable voltage.

danans 8y ago
I think the post I answered was referring to PGE's Solar Choice program, which I agree is not a good deal for a consumer. But it's marketed specifically as a program where you pay a premium to fund the greening of the grid [1][2]. It actually states that you will pay a premium for this plan. 1. https://www.pge.com/en_US/residential/solar-and-vehicles/options/solar/solar-choice/solar-choice.page?WT.mc_id=Vanity_solarchoice https://www.pge.com/en_US/residential/solar-and-vehicles/opt... 2. https://www.sfgate.com/business/article/PG-E-s-eco-friendly-offer-Pay-more-and-6805020.php https://www.sfgate.com/business/article/PG-E-s-eco-friendly-...
- tathougies 8y ago
  I am not referring to PGE's solar choice program. Marin county runs its own green energy, independent of PG&E. PG&E owns the wires. I get it costs money to run the wires. However, it is wrong to waive the fee for those using PG&E services. It's anti-competitive and bad for the state.
azernik 8y ago
Mostly because of the historical way the business model worked - the portion of your bill that varies based on energy usage is all out of proportion to the portion of the cost to the energy company that comes from varies based on energy usage. Basically, the electric companies' business model is like the cell phone companies' - build infrastructure, charge by usage - which means that low-cost energy sources, especially out of PG&E's control, are disastrous for their business model. It's a serious problem I've heard a lot of talk about in renewable energy policy circles, and the generally accepted idea of a functional market structure in this new world is to have a grid company, which charges only that distribution fee, and a generation company, which charges you for the cost of generation. But we're not there yet, so PG&E needs to find ways to not lose money on the grid hookup for customers who buy cheap forms of energy (or are, godforbid, energy-neutral with relation to the grid).
- zxcmx 8y ago
  Grid companies are tricky because there’s no market there. It is almost the textbook definition of a natural monopoly. You’re either hooked up or you’re not. Or you run multiple “grids” somehow which seems more economically wasteful and is legislatively tricky in terms of rights (to run lines, overhead or underfoot). It seems like the cost of maintaining poles and transformers goes up a lot every year... How to keep them honest? It seems like you would have to regulate to the point of ($pure distribution company) being essentially a government enterprise in all but name.
  - azernik 8y ago
    Yes. I mean, for those reasons, PG&E is already a highly-regulated natural monopoly; they just happen to bundle in the more normal generation market with the naturally-monopolist grid market. (Which is part of what makes their lobbying work so problematic, since they're so regulated that they're almost a government branch themselves.) Splitting the company into a 1) a government or quasi-government enterprise to handle the parts not suitable to the market, and 2) a much-less-regulated company handling the more market-amenable activities, could give the system as a whole a lot more of the efficiencies of a market system.
    - njarboe 8y ago
      And if you don't do it right things can get all screwed up in a hurry. California tried to do this with some really bad rules (power companies must by power in an unregulated spot market but sell into a regulated market for some number of years) in 2000 and ended up with the bankruptcy of PG&E, rolling blackouts, $40 billion lost by the state of California due to manipulated inflated prices, and the only successful recall of a California Governor in history. [1] for the gory details. [1] https://en.wikipedia.org/wiki/California_electricity_crisis https://en.wikipedia.org/wiki/California_electricity_crisis
      - azernik 8y ago
        Yeah, designing a market is hard and needs professional economists involved, not just politicians riddled with conflicts of interest and taking all their information from lobbyists.

by bdamm 8y ago

danans 8y ago

I think the post I answered was referring to PGE's Solar Choice program, which I agree is not a good deal for a consumer. But it's marketed specifically as a program where you pay a premium to fund the greening of the grid [1][2]. It actually states that you will pay a premium for this plan. 1. https://www.pge.com/en_US/residential/solar-and-vehicles/options/solar/solar-choice/solar-choice.page?WT.mc_id=Vanity_solarchoice https://www.pge.com/en_US/residential/solar-and-vehicles/opt... 2. https://www.sfgate.com/business/article/PG-E-s-eco-friendly-offer-Pay-more-and-6805020.php https://www.sfgate.com/business/article/PG-E-s-eco-friendly-...

tathougies 8y ago
I am not referring to PGE's solar choice program. Marin county runs its own green energy, independent of PG&E. PG&E owns the wires. I get it costs money to run the wires. However, it is wrong to waive the fee for those using PG&E services. It's anti-competitive and bad for the state.

azernik 8y ago

Mostly because of the historical way the business model worked - the portion of your bill that varies based on energy usage is all out of proportion to the portion of the cost to the energy company that comes from varies based on energy usage. Basically, the electric companies' business model is like the cell phone companies' - build infrastructure, charge by usage - which means that low-cost energy sources, especially out of PG&E's control, are disastrous for their business model. It's a serious problem I've heard a lot of talk about in renewable energy policy circles, and the generally accepted idea of a functional market structure in this new world is to have a grid company, which charges only that distribution fee, and a generation company, which charges you for the cost of generation. But we're not there yet, so PG&E needs to find ways to not lose money on the grid hookup for customers who buy cheap forms of energy (or are, godforbid, energy-neutral with relation to the grid).

zxcmx 8y ago
Grid companies are tricky because there’s no market there. It is almost the textbook definition of a natural monopoly. You’re either hooked up or you’re not. Or you run multiple “grids” somehow which seems more economically wasteful and is legislatively tricky in terms of rights (to run lines, overhead or underfoot). It seems like the cost of maintaining poles and transformers goes up a lot every year... How to keep them honest? It seems like you would have to regulate to the point of ($pure distribution company) being essentially a government enterprise in all but name.
- azernik 8y ago
  Yes. I mean, for those reasons, PG&E is already a highly-regulated natural monopoly; they just happen to bundle in the more normal generation market with the naturally-monopolist grid market. (Which is part of what makes their lobbying work so problematic, since they're so regulated that they're almost a government branch themselves.) Splitting the company into a 1) a government or quasi-government enterprise to handle the parts not suitable to the market, and 2) a much-less-regulated company handling the more market-amenable activities, could give the system as a whole a lot more of the efficiencies of a market system.
  - njarboe 8y ago
    And if you don't do it right things can get all screwed up in a hurry. California tried to do this with some really bad rules (power companies must by power in an unregulated spot market but sell into a regulated market for some number of years) in 2000 and ended up with the bankruptcy of PG&E, rolling blackouts, $40 billion lost by the state of California due to manipulated inflated prices, and the only successful recall of a California Governor in history. [1] for the gory details. [1] https://en.wikipedia.org/wiki/California_electricity_crisis https://en.wikipedia.org/wiki/California_electricity_crisis
    - azernik 8y ago
      Yeah, designing a market is hard and needs professional economists involved, not just politicians riddled with conflicts of interest and taking all their information from lobbyists.