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In California we have the CPUC which regulates utilities. Our three biggest utilities charge around 3x the national average for electricity. The largest--PG&E--

In California we have the CPUC which regulates utilities. Our three biggest utilities charge around 3x the national average for electricity. The largest--PG&E--has also been setting the state on fire and blowing up neighborhoods. It doesn't seem like this model works either.

Retric 3y ago
The actual implementation matters, when a bridge fails the issue isn’t bridges it’s the design of that specific bridge. As the model works fine in other locations, fixing California’s issues with mismanagement/poor incentives should be the priority not simply giving up.
- hedora 3y ago
  For example, for PG&E, the root cause of them blowing up that neighborhood was that the money that was supposed to go to upgrading the gas lines was embezzled and they faked the repair logs for the repairs. Now, we have no idea which lines were repaired and not. Since this started decades ago, they have to dig up and inspect a huge number of lines. Anyway, "mismanagement/poor incentives" is leaving out a lot of details involving graft and corruption, and malicious local governments. For an example of corrupt/malicious local regulators: the Golden Gate Bridge maintenance road they recently built in Marin cost more than the bridge (inflation adjusted) and took longer to plan + build as well.
  - bushbaba 3y ago
    What i dont get is that you have a private company which mis managed its assets. Caused harm to the public. And the public bails them out with no equity or upside. Total shame as the CPUC could have demanded the state or rate payers get equity/bonds in the company for the bail out.
    - ryandrake 3y ago
      The USA basically has one politically viable solution to every problem it faces: “handing money to corporations.” That’s all Congress and States are willing to do. Electric utility graft and corruption? Hand them money. Banking failure? Hand them money. Airplanes falling apart? Hand them money. Health Care incentives misaligned? Hand them money. Poverty? Hand money to corporations that will embezzle most of it. People out of work during COVID? Hand their employers money. Top corporations getting too big and powerful? Believe it or not, hand them money. That’s the only tool in the toolbox. It’s helpful to think of Congress as a gigantic money funnel where our tax dollars go in and they take turns aiming it at their favorite corporations.
      - the_optimist 3y ago
        The government itself is akin to a perfect corporation: not liable, no accountability, monopoly on taking, monopoly on force. What’s this alternative that corporations that you’re alluding to?
        the_optimist 3y ago
        Somehow voting reveals this government-is-godlike thinking that a magic superpower is going to bestow greatness upon humanity and achieve all of its hopes and dreams. When we look for a single example of this in all of history, the result is a null set, and in most cases the saviors are monstrous. Nonetheless, somehow this hope persists. See it every time in the votes here.
  - paholg 3y ago
    Jesus, in my mind the first thing you do there is arrest a bunch of people and nationalize (or statenize I guess, or whatever the word would be) the company.
    - eropple 3y ago
      Statenize, v.: to banish to Staten Island. Can't say it couldn't help.
- zbrozek 3y ago
  What seems to actually work is increasing market competitiveness. The open access rules that gave us MVNOs appear to have worked great. Texas electric customers have lots of choice and lower costs under similar rules. These broadband subsidies might be too good, or at least too well captured by too few players. They may be a good idea generally, but it looks like it's time to revisit the details.
  - Retric 3y ago
    MVNOs share infrastructure. Nowhere has competitiveness in terms of the actual grid only on the energy production and billing sides. The Texas grid is a massive failure in terms of both cost and reliability. Somewhere between 246 and 702 people were killed in 2021 when operators had already seen similar issues in 2011. Similarly people received bills that more than wiped out any long term savings they had received from hourly rate charging.
  - dangus 3y ago
    Is Texas electric a good example? It seems like a lot of people in Texas were swindled into buying variable rate plans that caused rate spikes resulting in $5,000 electric bills. https://www.businessinsider.com/why-texas-residents-hit-with-soaring-electric-bills-winter-storms-2021-2 https://www.businessinsider.com/why-texas-residents-hit-with... ERCOT is not a model that anyone should strive to emulate. https://99percentinvisible.org/episode/grid-locked/ https://99percentinvisible.org/episode/grid-locked/
    - 9659 3y ago
      Not a swindle. One company offered a plan where all of the electricity was purchased on the spot market. All of it. Spot market purchases of electricity are very cheap. Except when they aren't. Most months my electricity bill was 1/2 of current.
      - dangus 3y ago
        It’s a swindle because of the marketing of the plans and the exorbitantly high maximum rate caps. Every person who has knocked on my door to sell variable rate plans emphasizes the upside of the deal: why pay more than the current rate? You’re wasting your money on paying for the fixed rate that’s mostly higher than the going rate. Like you said, most of the time you save a good amount of money. The salespeople and marketing pamphlets emphasize that. Do you really believe that the executives at these utilities are ignorant to the fact that most of their customers don’t fully understand the implications? I think they sell the plans specifically because customers don’t understand them. Worse for Texas, their system’s market pricing setup incentivizes power utilities to minimize their overhead capacity. The closer their supply is to demand, the higher the price they can get. But it leaves very little wiggle room for emergency situations (99% Invisible has a good episode about this). Therefore, their grid is more prone to spikes in variable rate pricing than other states. Like financial instruments such as options trading, financial games like this make sense for the wealthy who have a cushion of risk tolerance. I can make more money faster with options trading compared to an index fund! But for the median and below wage earner, sudden bill surprises shouldn’t be something that the government enables for basic necessities like utilities.
deleted 3y ago
[deleted]
cowpig 3y ago
Are you saying the price capping model doesn't work? If so I don't follow the thought process: you're comparing California (price capped) against the national average (also mostly price capped to some degree)
- zbrozek 3y ago
  That's a good criticism. The comparison is more to cellular providers where there's open access to the same underlying infrastructure, and we have consistently good pricing nationwide thanks to competition. The point in referencing national averages is to show that the electric utility model can result in sclerotic and under-performant regions that are impossible to fix.
gamblor956 3y ago
The BLS actually maintains statistics on this, and while CA does pay higher than average prices, it's less than 2x the national average. Considering the geographic size of the electricity grid in CA, that's not surprising. A bigger grid is more expensive to build and maintain.
- zbrozek 3y ago
  The average price paid for a KWh is very different than what a median customer pays for a marginal KWh. There are myriad small utilities that drag down the average price paid for a KWh in CA, but the three big IOUs cover the majority of accounts. And they all use the same transmission network.
  - gamblor956 3y ago
    The numbers I am citing are based on the biggest utilities, unless you do not consider PG&E to be one of CA's biggest utilities. If we included all CA utilities, CA customers would only pay slightly above the national average.
    - zbrozek 3y ago
      I'm not sure how the US average residential retail number is weighted, but let's take it at face value at $0.1619/KWh. [1] Baseline allocations are very small (around San Francisco--territory T--you get 177 KWh/mo in the summer and 234 KWh/mo in the winter). Marginal consumption is almost guaranteed to be in the second tier. Under the old default E-1 plan, that means your marginal rate is currently $0.5257/KWh. [2] This is in excess of 3x the national retail average. But E-1 isn't the default plan any more. These days that's TOU-C. It's more difficult to come up with clean comparisons with a time-of-use plan. To keep it simple, I'll just average the rates together. The variation across time and season is not huge, so it should be good-enough approximation. Under that plan your marginal rate is around $0.5388/KWh. [3] This is also in excess of 3x the national retail average. What about at the other end of the state? I don't know as much about baselines around San Diego since I don't live there. If we use the same assumptions for SDG&E as we did for PG&E, the marginal KWh there comes out to $0.4833/KWh. [4] This is almost exactly 3x the national average retail rate. And if you're somewhere between these two utilities and on SCE? The same assumptions put you at $0.43/KWh. [5] So you're just barely under 3x the national average. [1] https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a https://www.eia.gov/electricity/monthly/epm_table_grapher.ph... [2] https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_E-1.pdf https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED... [3] https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_E-TOU-C.pdf https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED... [4] https://www.sdge.com/sites/default/files/regulatory/1-1-24%20Schedule%20DR%20Total%20Rates%20Table.pdf https://www.sdge.com/sites/default/files/regulatory/1-1-24%2... [5] https://www.sce.com/residential/rates/Standard-Residential-Rate-Plan#tab2 https://www.sce.com/residential/rates/Standard-Residential-R...

Retric 3y ago

The actual implementation matters, when a bridge fails the issue isn’t bridges it’s the design of that specific bridge. As the model works fine in other locations, fixing California’s issues with mismanagement/poor incentives should be the priority not simply giving up.

hedora 3y ago
For example, for PG&E, the root cause of them blowing up that neighborhood was that the money that was supposed to go to upgrading the gas lines was embezzled and they faked the repair logs for the repairs. Now, we have no idea which lines were repaired and not. Since this started decades ago, they have to dig up and inspect a huge number of lines. Anyway, "mismanagement/poor incentives" is leaving out a lot of details involving graft and corruption, and malicious local governments. For an example of corrupt/malicious local regulators: the Golden Gate Bridge maintenance road they recently built in Marin cost more than the bridge (inflation adjusted) and took longer to plan + build as well.
- bushbaba 3y ago
  What i dont get is that you have a private company which mis managed its assets. Caused harm to the public. And the public bails them out with no equity or upside. Total shame as the CPUC could have demanded the state or rate payers get equity/bonds in the company for the bail out.
  - ryandrake 3y ago
    The USA basically has one politically viable solution to every problem it faces: “handing money to corporations.” That’s all Congress and States are willing to do. Electric utility graft and corruption? Hand them money. Banking failure? Hand them money. Airplanes falling apart? Hand them money. Health Care incentives misaligned? Hand them money. Poverty? Hand money to corporations that will embezzle most of it. People out of work during COVID? Hand their employers money. Top corporations getting too big and powerful? Believe it or not, hand them money. That’s the only tool in the toolbox. It’s helpful to think of Congress as a gigantic money funnel where our tax dollars go in and they take turns aiming it at their favorite corporations.
    - the_optimist 3y ago
      The government itself is akin to a perfect corporation: not liable, no accountability, monopoly on taking, monopoly on force. What’s this alternative that corporations that you’re alluding to?
      - the_optimist 3y ago
        Somehow voting reveals this government-is-godlike thinking that a magic superpower is going to bestow greatness upon humanity and achieve all of its hopes and dreams. When we look for a single example of this in all of history, the result is a null set, and in most cases the saviors are monstrous. Nonetheless, somehow this hope persists. See it every time in the votes here.
- paholg 3y ago
  Jesus, in my mind the first thing you do there is arrest a bunch of people and nationalize (or statenize I guess, or whatever the word would be) the company.
  - eropple 3y ago
    Statenize, v.: to banish to Staten Island. Can't say it couldn't help.
zbrozek 3y ago
What seems to actually work is increasing market competitiveness. The open access rules that gave us MVNOs appear to have worked great. Texas electric customers have lots of choice and lower costs under similar rules. These broadband subsidies might be too good, or at least too well captured by too few players. They may be a good idea generally, but it looks like it's time to revisit the details.
- Retric 3y ago
  MVNOs share infrastructure. Nowhere has competitiveness in terms of the actual grid only on the energy production and billing sides. The Texas grid is a massive failure in terms of both cost and reliability. Somewhere between 246 and 702 people were killed in 2021 when operators had already seen similar issues in 2011. Similarly people received bills that more than wiped out any long term savings they had received from hourly rate charging.
- dangus 3y ago
  Is Texas electric a good example? It seems like a lot of people in Texas were swindled into buying variable rate plans that caused rate spikes resulting in $5,000 electric bills. https://www.businessinsider.com/why-texas-residents-hit-with-soaring-electric-bills-winter-storms-2021-2 https://www.businessinsider.com/why-texas-residents-hit-with... ERCOT is not a model that anyone should strive to emulate. https://99percentinvisible.org/episode/grid-locked/ https://99percentinvisible.org/episode/grid-locked/
  - 9659 3y ago
    Not a swindle. One company offered a plan where all of the electricity was purchased on the spot market. All of it. Spot market purchases of electricity are very cheap. Except when they aren't. Most months my electricity bill was 1/2 of current.
    - dangus 3y ago
      It’s a swindle because of the marketing of the plans and the exorbitantly high maximum rate caps. Every person who has knocked on my door to sell variable rate plans emphasizes the upside of the deal: why pay more than the current rate? You’re wasting your money on paying for the fixed rate that’s mostly higher than the going rate. Like you said, most of the time you save a good amount of money. The salespeople and marketing pamphlets emphasize that. Do you really believe that the executives at these utilities are ignorant to the fact that most of their customers don’t fully understand the implications? I think they sell the plans specifically because customers don’t understand them. Worse for Texas, their system’s market pricing setup incentivizes power utilities to minimize their overhead capacity. The closer their supply is to demand, the higher the price they can get. But it leaves very little wiggle room for emergency situations (99% Invisible has a good episode about this). Therefore, their grid is more prone to spikes in variable rate pricing than other states. Like financial instruments such as options trading, financial games like this make sense for the wealthy who have a cushion of risk tolerance. I can make more money faster with options trading compared to an index fund! But for the median and below wage earner, sudden bill surprises shouldn’t be something that the government enables for basic necessities like utilities.

deleted 3y ago

[deleted]

cowpig 3y ago

Are you saying the price capping model doesn't work? If so I don't follow the thought process: you're comparing California (price capped) against the national average (also mostly price capped to some degree)

zbrozek 3y ago
That's a good criticism. The comparison is more to cellular providers where there's open access to the same underlying infrastructure, and we have consistently good pricing nationwide thanks to competition. The point in referencing national averages is to show that the electric utility model can result in sclerotic and under-performant regions that are impossible to fix.

gamblor956 3y ago

The BLS actually maintains statistics on this, and while CA does pay higher than average prices, it's less than 2x the national average. Considering the geographic size of the electricity grid in CA, that's not surprising. A bigger grid is more expensive to build and maintain.

zbrozek 3y ago
The average price paid for a KWh is very different than what a median customer pays for a marginal KWh. There are myriad small utilities that drag down the average price paid for a KWh in CA, but the three big IOUs cover the majority of accounts. And they all use the same transmission network.
- gamblor956 3y ago
  The numbers I am citing are based on the biggest utilities, unless you do not consider PG&E to be one of CA's biggest utilities. If we included all CA utilities, CA customers would only pay slightly above the national average.
  - zbrozek 3y ago
    I'm not sure how the US average residential retail number is weighted, but let's take it at face value at $0.1619/KWh. [1] Baseline allocations are very small (around San Francisco--territory T--you get 177 KWh/mo in the summer and 234 KWh/mo in the winter). Marginal consumption is almost guaranteed to be in the second tier. Under the old default E-1 plan, that means your marginal rate is currently $0.5257/KWh. [2] This is in excess of 3x the national retail average. But E-1 isn't the default plan any more. These days that's TOU-C. It's more difficult to come up with clean comparisons with a time-of-use plan. To keep it simple, I'll just average the rates together. The variation across time and season is not huge, so it should be good-enough approximation. Under that plan your marginal rate is around $0.5388/KWh. [3] This is also in excess of 3x the national retail average. What about at the other end of the state? I don't know as much about baselines around San Diego since I don't live there. If we use the same assumptions for SDG&E as we did for PG&E, the marginal KWh there comes out to $0.4833/KWh. [4] This is almost exactly 3x the national average retail rate. And if you're somewhere between these two utilities and on SCE? The same assumptions put you at $0.43/KWh. [5] So you're just barely under 3x the national average. [1] https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a https://www.eia.gov/electricity/monthly/epm_table_grapher.ph... [2] https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_E-1.pdf https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED... [3] https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_E-TOU-C.pdf https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHED... [4] https://www.sdge.com/sites/default/files/regulatory/1-1-24%20Schedule%20DR%20Total%20Rates%20Table.pdf https://www.sdge.com/sites/default/files/regulatory/1-1-24%2... [5] https://www.sce.com/residential/rates/Standard-Residential-Rate-Plan#tab2 https://www.sce.com/residential/rates/Standard-Residential-R...