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The delivery fee being artificially low was a political decision to subsidize utility prices for the poor. Every single utility has step function of pricing for

The delivery fee being artificially low was a political decision to subsidize utility prices for the poor. Every single utility has step function of pricing for usage fees that works to capture the cost of providing the infrastructure. This is why net metering never made sense to utilities and why they were trying to reject it despite states and politicians seeking to force it on them. The utilities who did go all-in on net metering willingly did so at the generator rates which pissed off a ton of homeowners but that was actually a fair thing to do as that reflected the real price of the energy being provided.

lotsofpulp 5y ago
This is why all subsidies should be in the form of cash. Give poor people cash rather than obfuscate prices, which then results in hampering of market mechanisms and results in inefficient allocation of resources.
- lifeisstillgood 5y ago
  Aside from the obvious problem (which poor people) it is a very interesting idea to remove all subsidies (explicit and implicit). Terrifying but interesting
  - lotsofpulp 5y ago
    The obvious problem is solved by making it universal. You do not need to choose which poor people, just make it everyone, and then collect a marginal income tax. Although, I would prefer marginal sales taxes, but that seems technically impossible with current technology. The reason why it is not done is because it would lay bare all the inequities in the system, as well as require higher taxes due to not being able to hide the inequities in various forms of price discrimination/segmentation. Keeping prices obfuscated means costs can be distributed across the population in an unfair manner / benefits reaped in an unfair manner, as well as ability to punt costs into the future.
    - lifeisstillgood 5y ago
      >>> The reason why it is not done is because it would lay bare all the inequities in the system, Is that a common justification for UBI? I have not heard it but it would be a big reasons for me to support it - any reading you know of?
      - lotsofpulp 5y ago
        It is a personal conjecture. Every time I come across price obfuscation, or not doing the straight forward thing, it is because the seller does not want the transaction to be as transparent as possible. Tax deductions, credits, student loans, subsidized mortgages, taxpayer funded pensions, Medicaid reimbursing differently (lower) than Medicare reimbursing differently than Tricare, and so on and so forth. It is always a political decision to reduce total costs, or drive the benefit to certain populations, or use liberal assumptions to present future costs as less than they really are and so on and so forth. If we want people to have a house, give them money to buy a house. Or a house. Same with education, healthcare, everything. The big problem with this is cash has to be accounted for today, transparently, and cleanly. There is no option to muddy the waters.
        lifeisstillgood 5y ago
        I think I heartily agree. Openness is a great default, and while I will say a lot of things are more complicated than I know, this will at least drive the discussion into the open. IIRR Fannie Mae originally had explicit anti-Black lending policies. I do wonder how that would have been dealt with in a more open environment.
  - cool_dude85 5y ago
    Even in a single example such as your electric bill, this is absolutely impossible (or, maybe with a team of statisticians and accountants working on each customer's bill each month, and of course their associated costs). The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for. Is that electricity sold at the cost of fuel and maintenance? Electricity generated from a new plant then has a corresponding capital cost component but how's it portioned out at the customer level? What if they had to go change your transformer 20 years ago but your neighbor's still on their old 50-year-old transformer next door? Unworkable.
    - oldsecondhand 5y ago
      > The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for. There are generators independent from utilities, yet they figured the pricing out somehow.
      - powcontech 5y ago
        The pricing is sometimes based on negotiations which consider the cost of alternative sources of power, the operating cost of the plants, and refurbishments and maintenance it will need over the course of the contract term.
- oldsecondhand 5y ago
  The implicit assumption behind such subsidies is that the poor would spend the cash benefit frivolously (booze, entertainment etc.)
  - Wiseacre 5y ago
    Then there should be utility stamps in the way food stamps/SNAP cards exist, not artificially skewing prices.

lotsofpulp 5y ago

This is why all subsidies should be in the form of cash. Give poor people cash rather than obfuscate prices, which then results in hampering of market mechanisms and results in inefficient allocation of resources.

lifeisstillgood 5y ago
Aside from the obvious problem (which poor people) it is a very interesting idea to remove all subsidies (explicit and implicit). Terrifying but interesting
- lotsofpulp 5y ago
  The obvious problem is solved by making it universal. You do not need to choose which poor people, just make it everyone, and then collect a marginal income tax. Although, I would prefer marginal sales taxes, but that seems technically impossible with current technology. The reason why it is not done is because it would lay bare all the inequities in the system, as well as require higher taxes due to not being able to hide the inequities in various forms of price discrimination/segmentation. Keeping prices obfuscated means costs can be distributed across the population in an unfair manner / benefits reaped in an unfair manner, as well as ability to punt costs into the future.
  - lifeisstillgood 5y ago
    >>> The reason why it is not done is because it would lay bare all the inequities in the system, Is that a common justification for UBI? I have not heard it but it would be a big reasons for me to support it - any reading you know of?
    - lotsofpulp 5y ago
      It is a personal conjecture. Every time I come across price obfuscation, or not doing the straight forward thing, it is because the seller does not want the transaction to be as transparent as possible. Tax deductions, credits, student loans, subsidized mortgages, taxpayer funded pensions, Medicaid reimbursing differently (lower) than Medicare reimbursing differently than Tricare, and so on and so forth. It is always a political decision to reduce total costs, or drive the benefit to certain populations, or use liberal assumptions to present future costs as less than they really are and so on and so forth. If we want people to have a house, give them money to buy a house. Or a house. Same with education, healthcare, everything. The big problem with this is cash has to be accounted for today, transparently, and cleanly. There is no option to muddy the waters.
      - lifeisstillgood 5y ago
        I think I heartily agree. Openness is a great default, and while I will say a lot of things are more complicated than I know, this will at least drive the discussion into the open. IIRR Fannie Mae originally had explicit anti-Black lending policies. I do wonder how that would have been dealt with in a more open environment.
- cool_dude85 5y ago
  Even in a single example such as your electric bill, this is absolutely impossible (or, maybe with a team of statisticians and accountants working on each customer's bill each month, and of course their associated costs). The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for. Is that electricity sold at the cost of fuel and maintenance? Electricity generated from a new plant then has a corresponding capital cost component but how's it portioned out at the customer level? What if they had to go change your transformer 20 years ago but your neighbor's still on their old 50-year-old transformer next door? Unworkable.
  - oldsecondhand 5y ago
    > The fact is, the utility does not know how much money you cost them in a given month and it's impossible to say. Some of your electricity is being generated from a plant planned and built 40+ years ago, long since paid for. There are generators independent from utilities, yet they figured the pricing out somehow.
    - powcontech 5y ago
      The pricing is sometimes based on negotiations which consider the cost of alternative sources of power, the operating cost of the plants, and refurbishments and maintenance it will need over the course of the contract term.
oldsecondhand 5y ago
The implicit assumption behind such subsidies is that the poor would spend the cash benefit frivolously (booze, entertainment etc.)
- Wiseacre 5y ago
  Then there should be utility stamps in the way food stamps/SNAP cards exist, not artificially skewing prices.