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Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest per

Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest percentage of renewables in the country?

harryh 8y ago
Supply might be high, but demand exceeds it.
sxates 8y ago
Has a power company ever voluntarily lowered rates?
- gameswithgo 8y ago
  yes
mikestew 8y ago
Can someone please explain then why we are paying the highest prices in the continental US Not until you tell us where you live, because I'm not going to backtrack by looking up which state has $0.28/kWh electricity. Though without that knowledge, I'm going to guess something something supply and demand.
- dev_dull 8y ago
  Without a doubt California w/ PG&E.
Latteland 8y ago
you left out your state :-) I thought washington state was the state with most renewables. I pay about 12c per kwh.
- milcron 8y ago
  That's mostly due to the hydroelectric dams, though. Negative prices come from too much solar power in the middle of the day.
pkaye 8y ago
It depends on where. In the US there is a state to state variation. In California for example, after the Enron power crisis, the government guaranteed ROI for construction of new power plants. Also don't forget there other costs beyond generation (like transmission lines and other infrastructure.)
dev_dull 8y ago
I wonder about this as well. I think it’s time we start getting real answers from PG&E about why our power cost so much when apparently it’s so abundant. Even with solar they charge me $10/month to be hooked into the grid, even though they’re using that same connection to sell my excess premium renewable energy to others.
- ProAm 8y ago
  > Even with solar they charge me $10/month to be hooked into the grid, even though they’re using that same connection to sell my excess premium renewable energy to others. This is likely a charge to help maintain the grid so you can sell your supply. Consider it the Apple Tax of the power grid, but its not 30%
- thinkcontext 8y ago
  You act like you are doing them a favor, they would much rather not have net metering. I also have solar panels on my roof, though not in CA. Net metering is definitely a subsidy. They credit you the retail rate for electricity not the wholesale rate they buy it at. And the grid acts as your battery, even though you pay the same grid maintenance charges as your neighbors who don't get that benefit.
sj4nz 8y ago
I think it's because government and electrical utility systems have a weird regulatory setup. Many utility systems have to petition to alter their prices with these governments. No one ever asks to "reduce" prices voluntarily in most systems like this. So this must have the long-term effect of propping up prices where it is hard to compete for business where everyone is supposed to charge the same "approved" rate for energy in a given market.
rb808 8y ago
I can't say for sure, but quite likely renewables cause high costs like the article says. The problem is that electricity generators of all types have very high fixed costs. If you have a lot of wind and solar power its a problem that it ruins the profitability of the traditional generators half the year, so they need high prices in the other half to cover the capital costs. Also California isn't most expensive, seems pretty much the same as many blue states. https://www.eia.gov/electricity/state/ https://www.eia.gov/electricity/state/
- aphextron 8y ago
  >Also California isn't most expensive, seems pretty much the same as many blue states. https://www.eia.gov/electricity/state/ https://www.eia.gov/electricity/state/ >Data for 2016 This lists California at $0.15/kWh. I've never paid even close to that anywhere I've lived. The current PGE residential rate of $0.28/kWh [0] is about the same as Honolulu, Hawaii, where 100% of electricity is produced from burning natural gas and petroleum.[1] [0] https://www.pge.com/tariffs/electric.shtml https://www.pge.com/tariffs/electric.shtml [1] https://www.hawaiianelectric.com/billing-and-payment/rates-and-regulations/average-price-of-electricity https://www.hawaiianelectric.com/billing-and-payment/rates-a...
  - rconti 8y ago
    Silicon Valley Electric was 8c when I lived there, 10c now. My PG&E's lowest off-peak rate is now 16c, though I'm on a TOU plan and just installed solar, and I have generation through Peninsula Clean Energy so my bill is somewhat more complicated than the charts involved to send Apollo 11 to the moon.
    - mmt 8y ago
      > Silicon Valley Electric was 8c when I lived there, 10c now. If you mean Silicon Valley Power, the municipal electric utility for Santa Clara, it's now (as of Jan 2017) 11.82c [1] for residential non-TOU for the upper tier. It's also only for the city of Santa Clara. Palo Alto has a municipal utility, but its rates are higher, and these are exceptions. AFAIK, the vast majority of California is served by a private utility (e.g. PG&E). [1] http://www.siliconvalleypower.com/home/showdocument?id=6253 http://www.siliconvalleypower.com/home/showdocument?id=6253
jartelt 8y ago
CA is a huge state with a lot of grid to manage. There are lot of transmission lines and lots of trees, fires, mountains etc. that must be dealt with when doing grid maintenance. Utilities also over installed a lot of generation capacity after the blackouts in the 2000s. We are still footing the bill for all the natural gas plants they built out of fear for future blackouts. Electricity demand has been flat since 2008, and many generators don't get used much (yet rate payers still paid a guaranteed rate of return to the utility to build the plants).
- floatrock 8y ago
  LA Times did a big piece about misaligned utility incentives: http://www.latimes.com/projects/la-fi-electricity-capacity/ http://www.latimes.com/projects/la-fi-electricity-capacity/ Basically utilities don't really make money on generation, they make money by building infrastructure, financing that with a 20-year bond, and passing it onto the rate payers. So if you make money by building power plants, you're going to build power plants and make the ratepayers pay for it.
esaym 8y ago
$0.07 here in Texas. Maybe you should move...
- aphextron 8y ago
  >$0.07 here in Texas. Maybe you should move... Where at? Is that wind power or just natural gas?
  - esaym 8y ago
    South/central Texas has always been between 0.07 - 0.14 for probably 15 years or so. I think its all mostly natural gas.
1996 8y ago
> please explain then why we are paying the highest prices (...) in a state with the highest percentage of renewables I think you gave the answer yourself. If you prefer the scientific method, take all the states and the percentage of renewables and do a plot. You will see mostly a line if you do not use the fake numbers (ex: 0.15 often reported for California instead of 0.28)
- rconti 8y ago
  Why is California's number "fake" but the other numbers in the data aren't?
thinkcontext 8y ago
The negative price doesn't help you, or your utility which is your economic proxy. Your utility is (largely) not paying the negative price because the price is negative when not much electricity is being used. Think about it, how much electricity is the average house using at 3am? Not much. So, the price being negative then doesn't save you any money. Now, if you set your dishwasher, electric dryer, etc to run at 3am then you wind up saving your utility some money. Some industrial customers have the ability to automatically ramp equipment up and down or schedule maintenance for when they know power prices will be high. CA having a large amount of intermittent renewable power sources means your grid has to spend more on storage or peaker plants, dirty gas plants that can ramp up and down quickly to match load. You pay for that in a higher bill.
pmoriarty 8y ago
"Can someone please explain then why we are paying the highest prices in the continental US for retail electricity..." I don't know if you ever look at the pamphlets PG&E send you along with your bill, but it seems every month they're announcing a rate hike, with a meeting about it that's open to the public. Maybe someone who hasn't yet thrown away one of those pamphlets could quote the supposed reason for one of their rate hikes. They always have some excuse for doing it. With a price hike of something like 1% to 2% every month or two, it's a wonder we're not paying much, much more.
jules 8y ago
You answered your own question. Renewables cost more. Perhaps not if you factor in externalities, but those aren't factored in.

Can someone please explain then why we are paying the highest prices in the continental US for retail electricity, at $0.28/kWh, in a state with the highest percentage of renewables in the country?

harryh 8y ago

Supply might be high, but demand exceeds it.

sxates 8y ago

Has a power company ever voluntarily lowered rates?

gameswithgo 8y ago
yes

mikestew 8y ago

Can someone please explain then why we are paying the highest prices in the continental US Not until you tell us where you live, because I'm not going to backtrack by looking up which state has $0.28/kWh electricity. Though without that knowledge, I'm going to guess something something supply and demand.

dev_dull 8y ago
Without a doubt California w/ PG&E.

Latteland 8y ago

you left out your state :-) I thought washington state was the state with most renewables. I pay about 12c per kwh.

milcron 8y ago
That's mostly due to the hydroelectric dams, though. Negative prices come from too much solar power in the middle of the day.

pkaye 8y ago

It depends on where. In the US there is a state to state variation. In California for example, after the Enron power crisis, the government guaranteed ROI for construction of new power plants. Also don't forget there other costs beyond generation (like transmission lines and other infrastructure.)

dev_dull 8y ago

I wonder about this as well. I think it’s time we start getting real answers from PG&E about why our power cost so much when apparently it’s so abundant. Even with solar they charge me $10/month to be hooked into the grid, even though they’re using that same connection to sell my excess premium renewable energy to others.

ProAm 8y ago
> Even with solar they charge me $10/month to be hooked into the grid, even though they’re using that same connection to sell my excess premium renewable energy to others. This is likely a charge to help maintain the grid so you can sell your supply. Consider it the Apple Tax of the power grid, but its not 30%
thinkcontext 8y ago
You act like you are doing them a favor, they would much rather not have net metering. I also have solar panels on my roof, though not in CA. Net metering is definitely a subsidy. They credit you the retail rate for electricity not the wholesale rate they buy it at. And the grid acts as your battery, even though you pay the same grid maintenance charges as your neighbors who don't get that benefit.

sj4nz 8y ago

I think it's because government and electrical utility systems have a weird regulatory setup. Many utility systems have to petition to alter their prices with these governments. No one ever asks to "reduce" prices voluntarily in most systems like this. So this must have the long-term effect of propping up prices where it is hard to compete for business where everyone is supposed to charge the same "approved" rate for energy in a given market.

rb808 8y ago

I can't say for sure, but quite likely renewables cause high costs like the article says. The problem is that electricity generators of all types have very high fixed costs. If you have a lot of wind and solar power its a problem that it ruins the profitability of the traditional generators half the year, so they need high prices in the other half to cover the capital costs. Also California isn't most expensive, seems pretty much the same as many blue states. https://www.eia.gov/electricity/state/ https://www.eia.gov/electricity/state/

aphextron 8y ago
>Also California isn't most expensive, seems pretty much the same as many blue states. https://www.eia.gov/electricity/state/ https://www.eia.gov/electricity/state/ >Data for 2016 This lists California at $0.15/kWh. I've never paid even close to that anywhere I've lived. The current PGE residential rate of $0.28/kWh [0] is about the same as Honolulu, Hawaii, where 100% of electricity is produced from burning natural gas and petroleum.[1] [0] https://www.pge.com/tariffs/electric.shtml https://www.pge.com/tariffs/electric.shtml [1] https://www.hawaiianelectric.com/billing-and-payment/rates-and-regulations/average-price-of-electricity https://www.hawaiianelectric.com/billing-and-payment/rates-a...
- rconti 8y ago
  Silicon Valley Electric was 8c when I lived there, 10c now. My PG&E's lowest off-peak rate is now 16c, though I'm on a TOU plan and just installed solar, and I have generation through Peninsula Clean Energy so my bill is somewhat more complicated than the charts involved to send Apollo 11 to the moon.
  - mmt 8y ago
    > Silicon Valley Electric was 8c when I lived there, 10c now. If you mean Silicon Valley Power, the municipal electric utility for Santa Clara, it's now (as of Jan 2017) 11.82c [1] for residential non-TOU for the upper tier. It's also only for the city of Santa Clara. Palo Alto has a municipal utility, but its rates are higher, and these are exceptions. AFAIK, the vast majority of California is served by a private utility (e.g. PG&E). [1] http://www.siliconvalleypower.com/home/showdocument?id=6253 http://www.siliconvalleypower.com/home/showdocument?id=6253

jartelt 8y ago

CA is a huge state with a lot of grid to manage. There are lot of transmission lines and lots of trees, fires, mountains etc. that must be dealt with when doing grid maintenance. Utilities also over installed a lot of generation capacity after the blackouts in the 2000s. We are still footing the bill for all the natural gas plants they built out of fear for future blackouts. Electricity demand has been flat since 2008, and many generators don't get used much (yet rate payers still paid a guaranteed rate of return to the utility to build the plants).

floatrock 8y ago
LA Times did a big piece about misaligned utility incentives: http://www.latimes.com/projects/la-fi-electricity-capacity/ http://www.latimes.com/projects/la-fi-electricity-capacity/ Basically utilities don't really make money on generation, they make money by building infrastructure, financing that with a 20-year bond, and passing it onto the rate payers. So if you make money by building power plants, you're going to build power plants and make the ratepayers pay for it.

esaym 8y ago

$0.07 here in Texas. Maybe you should move...

aphextron 8y ago
>$0.07 here in Texas. Maybe you should move... Where at? Is that wind power or just natural gas?
- esaym 8y ago
  South/central Texas has always been between 0.07 - 0.14 for probably 15 years or so. I think its all mostly natural gas.

1996 8y ago

> please explain then why we are paying the highest prices (...) in a state with the highest percentage of renewables I think you gave the answer yourself. If you prefer the scientific method, take all the states and the percentage of renewables and do a plot. You will see mostly a line if you do not use the fake numbers (ex: 0.15 often reported for California instead of 0.28)

rconti 8y ago
Why is California's number "fake" but the other numbers in the data aren't?

thinkcontext 8y ago

The negative price doesn't help you, or your utility which is your economic proxy. Your utility is (largely) not paying the negative price because the price is negative when not much electricity is being used. Think about it, how much electricity is the average house using at 3am? Not much. So, the price being negative then doesn't save you any money. Now, if you set your dishwasher, electric dryer, etc to run at 3am then you wind up saving your utility some money. Some industrial customers have the ability to automatically ramp equipment up and down or schedule maintenance for when they know power prices will be high. CA having a large amount of intermittent renewable power sources means your grid has to spend more on storage or peaker plants, dirty gas plants that can ramp up and down quickly to match load. You pay for that in a higher bill.

pmoriarty 8y ago

"Can someone please explain then why we are paying the highest prices in the continental US for retail electricity..." I don't know if you ever look at the pamphlets PG&E send you along with your bill, but it seems every month they're announcing a rate hike, with a meeting about it that's open to the public. Maybe someone who hasn't yet thrown away one of those pamphlets could quote the supposed reason for one of their rate hikes. They always have some excuse for doing it. With a price hike of something like 1% to 2% every month or two, it's a wonder we're not paying much, much more.

jules 8y ago

You answered your own question. Renewables cost more. Perhaps not if you factor in externalities, but those aren't factored in.