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IIRC the real costs of residential electricity are about half from infrastructure, half from actual energy consumption [1]. If we charged prices proportional to
by philipkglass 3y ago
IIRC the real costs of residential electricity are about half from infrastructure, half from actual energy consumption [1]. If we charged prices proportional to costs, high users would still pay significantly more than average users. The problem is that in many places these costs have been bundled together in a single "per unit" charge that effectively subsidizes the lowest consumers. Changing it so that prices go up at the low end of consumption and go down at the high end of consumption would widely be seen as unfair, so it's politically hard to correct the mis-pricing now that it's ossified into place by tradition.
[1] It's different for big industrial users, like factories operating 24/7; their per-unit costs are dominated by consumption rather than infrastructure. They also get lower prices partially reflecting these lower costs.
- reaperman 3y agoThanks for the more detailed information. I double-checked and it seems you're right for the states I could find data for - industrial users have some extra per-month fees to cover the baseload made available to them (billed per kW rather than per kWh) but these don't offset the far lower rates per kWh that I found. There is often a difference between "industrial" vs. "commercial" but both seem to pay lower rates than residential.
- RyanPringnitz 3y agoI wish I had the source for the stats, but I remember reading that a significant percentage (call it more than 1/8th of the total budget) of a electric utilities budget could be spent on -just- tree trimming services. This was discussed in the context of investments by a electric utility to decrease downtime during a storm, and how the (large) investments in the 12mos for tree trimming services is what allowed for so little downtime.