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> Electrical utilities don't need to be a government-granted monopoly like PG&E, which combines the worst aspects of government-run and private-sector business.

> Electrical utilities don't need to be a government-granted monopoly like PG&E, which combines the worst aspects of government-run and private-sector business. Silicon Valley Power proves there are better ways to run electrical utilities. Is Silicon Valley Power not a government-granted monopoly? How does their business model differ?

twblalock 7y ago
Silicon Valley Power is a nonprofit operated by the city government. It's a little island in the middle of the sea of the PG&E monopoly. I wouldn't consider it a monopoly in comparison to the massive scale of PG&E, even though it is operated by a city government. Statewide utilities are bloated and inefficient, and they abuse their monopoly power. PG&E acts like the only choices are to cause fires or turn off power when it gets windy -- it faces no pressure to find a better solution because there is no competition. Small-to-medium municipal utilities that serve smaller areas can serve their customers much better, as Silicon Valley Power demonstrates -- if people don't like it they can move to a neighboring city. In contrast, PG&E is almost impossible to avoid. California should give more cities and counties the ability to experiment with this model. Competition between municipal utilities is better than granting a single company a monopoly on a utility millions of people depend on.
- deleted 7y ago
  [deleted]
- unethical_ban 7y ago
  Let us clear up the terms we're using: They are both monopolies. But PG&E is investor owned, publicly traded. Their incentive is money, followed by quality of service. A government entity in terms of public services tends to have "getting their job done right" at the top of the list, albeit at a lower cost when possible.
  - greggman2 7y ago
    > A government entity in terms of public services tends to have "getting their job done right" at the top of the list, albeit at a lower cost when possible. not my experience. Most government entities try to raise as much money as possible to protect their jobs and raise their salaries. gettingthe job done right is not remotely near top of the list. See SFMTA or MTA (new your public transportaion) as 2 examples. Or watch IKIRU to see the same attitude in Japan. Yes it's a movie but it rings true to people's experience that goverment never tries to "getting their job done right"
    - kerkeslager 7y ago
      What exactly is "your experience"? You've ridden two subway systems and attributed their failures to not using your pet economic structure, and watched a fictional movie from 1952?
      - greggman2 7y ago
        It doesn't take a whole lot of googling to find thousands of example of poorly run government services. I gave 2 I thought were obvious examples but you can search and find 1000s more. I'm not defending evil and corrupt PG&E. I'm only responding to the idea that government services are magically incentivized at "getting their job done right". Their incentives rarely align to "getting their job done right". Other examples off the top of my head, public schools in the USA who have more money per student than pretty much every other country but have worse outcomes. I don't have a solution but clearly they are not "getting their job done right" https://nces.ed.gov/programs/coe/indicator_cmd.asp https://nces.ed.gov/programs/coe/indicator_cmd.asp Another example might be the USA's militarized police force killing its own citizens. Some people have arguied they're incentivized to buy all the military equipment because it raises their budgets. Again, they are not targetting "getting their job done right". And again I don't know the solution. Just pointing out making something a government serivce does not magically remove all bad incentives. you can read I guess a right leaning POV https://www.charleskochinstitute.org/issue-areas/criminal-justice-policing-reform/militarization-of-police/ https://www.charleskochinstitute.org/issue-areas/criminal-ju... or a left https://www.vox.com/2015/5/31/17937892/ferguson-protests-police-military-1033-program https://www.vox.com/2015/5/31/17937892/ferguson-protests-pol...
- sremani 7y ago
  Here is the important line for you to chew on in wikipedia article of SVP.. <wikipedia> SVP receives generation produced outside Santa Clara via transmission facilities owned and operated by PG&E under the direction of the California Independent System Operator (CAISO). </wikipedia> About 2/3rd of SVP power comes from outside. If PG&E cuts certain transmission lines the good folks of Santa Clara will feel the bite, a bit lesser perhaps, but a brown-out can be willfully imposed by PG&E
  - JJMcJ 7y ago
    Also the city of Santa Clara has no forested areas, avoiding the problems. The Berkeley campus is up against the East Bay hills and so there are trees all over near the campus.
- sqldba 7y ago
  > Statewide utilities are bloated and inefficient, and they abuse their monopoly power. This seems overly general. There's plenty of state-wide utilities in the rest the world which are fantastic in every regard including cost.
  - andrekandre 7y ago
    i think what the parent poster might have meant was that for-profit state monopolies are bloated and inefficient (as opposed to non-profit public utilities) that was my interpretation (from the context) anyways... maybe i’m wrong ^^;
  - rayiner 7y ago
    There are lots of things in the rest of the world that don’t exist in the US.
  - Spooky23 7y ago
    Utilities with regulated monopolies need to be on a tight leash from a regulatory perspective. They trade operational freedom for a reliable return on assets. This changed in the 80s and 90s with deregulation. Some of them even turned into growth stocks or did other financial fuckery that made investors money at the cost of rotting out the business. End of the day, local municipal utilities or co-ops almost always deliver a better level of service at a lower cost. Smaller scale makes field service more efficient and reduces overheads like executive compensation. One municipal utility I’m familiar with has a civil service scale for all staff — the head guy makes $140k.
- pbhjpbhj 7y ago
  >no pressure to find a better solution because there is no competition. // No-one wants a job, or to keep their current job?
  - dsfyu404ed 7y ago
    The threshold for keeping your job is very low when there is no competition. Compare how cops act (who are damn near impossible to fire and have a local monopoly) with how private security acts (who can be fired on a moments notice and who's customers are not locked to a particular provider).
- JJMcJ 7y ago
  Palo Alto also has municipal utilities. And the biggest, of course, is Los Angeles Department of Water and Power https://en.wikipedia.org/wiki/Los_Angeles_Department_of_Water_and_Power https://en.wikipedia.org/wiki/Los_Angeles_Department_of_Wate... PG&E seems to be particularly bad in terms of upkeep and frequent power failures. That is, the unintentional kind, not like the shutoffs this week.
cortesoft 7y ago
It is actually owned outright by the city of Santa Clara. It is not a private company given a monopoly. https://en.wikipedia.org/wiki/Silicon_Valley_Power https://en.wikipedia.org/wiki/Silicon_Valley_Power
CameronNemo 7y ago
The point also ignores the power of network effects -- certain industries are prone to monopoly. It is only natural that government oversight of these natural monopolies follows.
- twblalock 7y ago
  The problem is, the government always steps in and grants a monopoly before a natural monopoly develops by itself, thereby creating a self-fulfilling prophecy. Maybe a natural monopoly would not have developed statewide. Maybe the government makes a bad situation worse by picking the wrong winner before the market decides. Maybe the government should allow competition if cities and/or private businesses are willing to give it a shot -- it works pretty well where I live.
  - CameronNemo 7y ago
    I agree that municipalities should be given latitude to attempt to replace statewide utilities. But they should have some quality standards -- you would not want a rinky dink WISP with an invisible privacy record managing the internet access for schoolchildren.
- mindslight 7y ago
  Even taking it as a given that last-mile power distribution tends towards a natural monopoly for every neighborhood, this still doesn't mean that this monopoly needs to be agglomerated across such a wide area. This overt dereliction can only come from an entity that is "too big too fail". If this were one or two cities' local power companies, it would not be national news. Residents of those communities would be showing up at city meetings going "wtf", and could easily point at adjacent communities not doing such things as a reference.
- closeparen 7y ago
  The government made it clear that PG&E will be harshly punished for operating in high fire danger conditions, and so PG&E is not operating in high fire danger conditions. This outcome is exactly how government oversight is supposed to work.
johnhenry 7y ago
Your question intrigues me. While, I didn't find an answer (I guess I wasn't _that_ intrigued), I did stumble upon this interesting bit of history: http://www.siliconvalleypower.com/svp-and-community/about-svp/our-history http://www.siliconvalleypower.com/svp-and-community/about-sv...

twblalock 7y ago

Silicon Valley Power is a nonprofit operated by the city government. It's a little island in the middle of the sea of the PG&E monopoly. I wouldn't consider it a monopoly in comparison to the massive scale of PG&E, even though it is operated by a city government. Statewide utilities are bloated and inefficient, and they abuse their monopoly power. PG&E acts like the only choices are to cause fires or turn off power when it gets windy -- it faces no pressure to find a better solution because there is no competition. Small-to-medium municipal utilities that serve smaller areas can serve their customers much better, as Silicon Valley Power demonstrates -- if people don't like it they can move to a neighboring city. In contrast, PG&E is almost impossible to avoid. California should give more cities and counties the ability to experiment with this model. Competition between municipal utilities is better than granting a single company a monopoly on a utility millions of people depend on.

deleted 7y ago
[deleted]
unethical_ban 7y ago
Let us clear up the terms we're using: They are both monopolies. But PG&E is investor owned, publicly traded. Their incentive is money, followed by quality of service. A government entity in terms of public services tends to have "getting their job done right" at the top of the list, albeit at a lower cost when possible.
- greggman2 7y ago
  > A government entity in terms of public services tends to have "getting their job done right" at the top of the list, albeit at a lower cost when possible. not my experience. Most government entities try to raise as much money as possible to protect their jobs and raise their salaries. gettingthe job done right is not remotely near top of the list. See SFMTA or MTA (new your public transportaion) as 2 examples. Or watch IKIRU to see the same attitude in Japan. Yes it's a movie but it rings true to people's experience that goverment never tries to "getting their job done right"
  - kerkeslager 7y ago
    What exactly is "your experience"? You've ridden two subway systems and attributed their failures to not using your pet economic structure, and watched a fictional movie from 1952?
    - greggman2 7y ago
      It doesn't take a whole lot of googling to find thousands of example of poorly run government services. I gave 2 I thought were obvious examples but you can search and find 1000s more. I'm not defending evil and corrupt PG&E. I'm only responding to the idea that government services are magically incentivized at "getting their job done right". Their incentives rarely align to "getting their job done right". Other examples off the top of my head, public schools in the USA who have more money per student than pretty much every other country but have worse outcomes. I don't have a solution but clearly they are not "getting their job done right" https://nces.ed.gov/programs/coe/indicator_cmd.asp https://nces.ed.gov/programs/coe/indicator_cmd.asp Another example might be the USA's militarized police force killing its own citizens. Some people have arguied they're incentivized to buy all the military equipment because it raises their budgets. Again, they are not targetting "getting their job done right". And again I don't know the solution. Just pointing out making something a government serivce does not magically remove all bad incentives. you can read I guess a right leaning POV https://www.charleskochinstitute.org/issue-areas/criminal-justice-policing-reform/militarization-of-police/ https://www.charleskochinstitute.org/issue-areas/criminal-ju... or a left https://www.vox.com/2015/5/31/17937892/ferguson-protests-police-military-1033-program https://www.vox.com/2015/5/31/17937892/ferguson-protests-pol...
sremani 7y ago
Here is the important line for you to chew on in wikipedia article of SVP.. <wikipedia> SVP receives generation produced outside Santa Clara via transmission facilities owned and operated by PG&E under the direction of the California Independent System Operator (CAISO). </wikipedia> About 2/3rd of SVP power comes from outside. If PG&E cuts certain transmission lines the good folks of Santa Clara will feel the bite, a bit lesser perhaps, but a brown-out can be willfully imposed by PG&E
- JJMcJ 7y ago
  Also the city of Santa Clara has no forested areas, avoiding the problems. The Berkeley campus is up against the East Bay hills and so there are trees all over near the campus.
sqldba 7y ago
> Statewide utilities are bloated and inefficient, and they abuse their monopoly power. This seems overly general. There's plenty of state-wide utilities in the rest the world which are fantastic in every regard including cost.
- andrekandre 7y ago
  i think what the parent poster might have meant was that for-profit state monopolies are bloated and inefficient (as opposed to non-profit public utilities) that was my interpretation (from the context) anyways... maybe i’m wrong ^^;
- rayiner 7y ago
  There are lots of things in the rest of the world that don’t exist in the US.
- Spooky23 7y ago
  Utilities with regulated monopolies need to be on a tight leash from a regulatory perspective. They trade operational freedom for a reliable return on assets. This changed in the 80s and 90s with deregulation. Some of them even turned into growth stocks or did other financial fuckery that made investors money at the cost of rotting out the business. End of the day, local municipal utilities or co-ops almost always deliver a better level of service at a lower cost. Smaller scale makes field service more efficient and reduces overheads like executive compensation. One municipal utility I’m familiar with has a civil service scale for all staff — the head guy makes $140k.
pbhjpbhj 7y ago
>no pressure to find a better solution because there is no competition. // No-one wants a job, or to keep their current job?
- dsfyu404ed 7y ago
  The threshold for keeping your job is very low when there is no competition. Compare how cops act (who are damn near impossible to fire and have a local monopoly) with how private security acts (who can be fired on a moments notice and who's customers are not locked to a particular provider).
JJMcJ 7y ago
Palo Alto also has municipal utilities. And the biggest, of course, is Los Angeles Department of Water and Power https://en.wikipedia.org/wiki/Los_Angeles_Department_of_Water_and_Power https://en.wikipedia.org/wiki/Los_Angeles_Department_of_Wate... PG&E seems to be particularly bad in terms of upkeep and frequent power failures. That is, the unintentional kind, not like the shutoffs this week.

cortesoft 7y ago

It is actually owned outright by the city of Santa Clara. It is not a private company given a monopoly. https://en.wikipedia.org/wiki/Silicon_Valley_Power https://en.wikipedia.org/wiki/Silicon_Valley_Power

CameronNemo 7y ago

The point also ignores the power of network effects -- certain industries are prone to monopoly. It is only natural that government oversight of these natural monopolies follows.

twblalock 7y ago
The problem is, the government always steps in and grants a monopoly before a natural monopoly develops by itself, thereby creating a self-fulfilling prophecy. Maybe a natural monopoly would not have developed statewide. Maybe the government makes a bad situation worse by picking the wrong winner before the market decides. Maybe the government should allow competition if cities and/or private businesses are willing to give it a shot -- it works pretty well where I live.
- CameronNemo 7y ago
  I agree that municipalities should be given latitude to attempt to replace statewide utilities. But they should have some quality standards -- you would not want a rinky dink WISP with an invisible privacy record managing the internet access for schoolchildren.
mindslight 7y ago
Even taking it as a given that last-mile power distribution tends towards a natural monopoly for every neighborhood, this still doesn't mean that this monopoly needs to be agglomerated across such a wide area. This overt dereliction can only come from an entity that is "too big too fail". If this were one or two cities' local power companies, it would not be national news. Residents of those communities would be showing up at city meetings going "wtf", and could easily point at adjacent communities not doing such things as a reference.
closeparen 7y ago
The government made it clear that PG&E will be harshly punished for operating in high fire danger conditions, and so PG&E is not operating in high fire danger conditions. This outcome is exactly how government oversight is supposed to work.

johnhenry 7y ago

Your question intrigues me. While, I didn't find an answer (I guess I wasn't _that_ intrigued), I did stumble upon this interesting bit of history: http://www.siliconvalleypower.com/svp-and-community/about-svp/our-history http://www.siliconvalleypower.com/svp-and-community/about-sv...