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California’s highly regulated energy industry doesn’t seem like much better alternative?

ok_dad 3y ago
Why Texas vs California? Both are examples of corporate capture of regulators with unreliable and dangerous grids as a result. California has fires due to it, Texas gets outages, they both suck. It’s not fucking red v blue in here.
lesuorac 3y ago
I mean there's 50 states and a handful of territories if we're sticking to the US. If you don't like how Texas or California does things there's still plenty of options to choose from. But yeah, California has problems because it's regulators get stingy. If you control how much maintenance a company can do and cut back how much it should do then don't be surprised when things are poorly maintained. > When PG&E suggested inspecting 300,000 poles a year to ensure safety in 2012, CPUC cut the total to 235,000.¹¹ In 2011 and 2012, when PG&E spent almost $100 million more on replacing poles than allowed by CPUC, the regulator took that as a reason to deny future claims for pole replacement spending. It said “PG&E demonstrated the capacity and willingness to spend more than previously authorized…to meet service obligations,” thus they would not include extra required pole replacements in the “rate base.” These sorts of decisions created exactly the wrong incentives, penalizing PG&E for doing more than was required.¹² https://ciceroinstitute.org/pge-failing-california/ https://ciceroinstitute.org/pge-failing-california/
sillystuff 3y ago
California was the leader in deregulation of their electric utilities. AB1890 was passed in 1996 deregulating California's electricity sector. The '90s deregulation directly led to an 800% increase in wholesale electricity prices in 2000, and rolling blackouts for customers of investor owned utilities like SDGE (San Diego) and PGE (Central/Northern California). The government owned utilities, like LADWP (serving the Los Angeles area) did not need to resort to rolling blackouts (zero blackouts), and currently have much lower rates* while being fully sustained by the rate payers (not having the parasitic "investors" demanding greater profits allows for proper long-term planning and significantly lower prices for the rate payers). * Average $0.26/kWh LADWP. Average $0.45/kWh PGE
- gotoeleven 3y ago
  Wait Im confused, if PG&E is deregulated then how come the legislature can pass a law to require income-based billing? What exactly do you mean by deregulated?
  - danans 3y ago
    The wholesale electrical energy markets in California are deregulated. As a consumer, you might buy retail electrical energy, transmission and distribution from an investor owned utility like PG&E, which is regulated by the California Public Utilities Commission.
    - analyte123 3y ago
      An appropriate analogy for this would be where wholesale beef markets were "deregulated", but the state government put in a program that allowed approximately half the state's population to get vouchers for a 35% discount on beef, driving up the price for everyone else (the CARE program). And the state government mandated grocers and restaurants buy certified organic regenerative beef for at least 50% of the beef they sell (the renewable requirement).
      - danans 3y ago
        You are leaving out some very important things: - Price stability itself has a value for electricity consumers. Insulating consumers from the price variations that come from the inherent variability in supply and demand is a major "feature" of retail electric service. While one could provide their own stability with enough personal batteries and generators, practically that's only really possible for the wealthy. - Lack of regulation around planning, upkeep, maintenance, and backup planning results in short-term profit maximization among generators (and cost minimization among consumers who enjoy very low electric rates in the short term) leads to situations like the catastrophic Texas outages of 2021. Now that Texas has legislated price-caps (which is direct economic regulation) [1], typical rates will rise. 1. https://www.texastribune.org/2023/05/22/texas-electricity-power-plants-performance-credits-bill/ https://www.texastribune.org/2023/05/22/texas-electricity-po...
7thaccount 3y ago
California was one of the first to move to a wholesale electricity market. The only problem was they didn't have provisions to take care of gaming and market power and ENRON figured out how to make millions upon millions from it. Since then, all the wholesale electricity markets in the US have to have market monitors that look for these kinds of abuses and have authority to fix. There are certainly still major issues with the designs, but we shouldn't have another problem like what California had in the early 2000s.

Why Texas vs California? Both are examples of corporate capture of regulators with unreliable and dangerous grids as a result. California has fires due to it, Texas gets outages, they both suck. It’s not fucking red v blue in here.

lesuorac 3y ago

I mean there's 50 states and a handful of territories if we're sticking to the US. If you don't like how Texas or California does things there's still plenty of options to choose from. But yeah, California has problems because it's regulators get stingy. If you control how much maintenance a company can do and cut back how much it should do then don't be surprised when things are poorly maintained. > When PG&E suggested inspecting 300,000 poles a year to ensure safety in 2012, CPUC cut the total to 235,000.¹¹ In 2011 and 2012, when PG&E spent almost $100 million more on replacing poles than allowed by CPUC, the regulator took that as a reason to deny future claims for pole replacement spending. It said “PG&E demonstrated the capacity and willingness to spend more than previously authorized…to meet service obligations,” thus they would not include extra required pole replacements in the “rate base.” These sorts of decisions created exactly the wrong incentives, penalizing PG&E for doing more than was required.¹² https://ciceroinstitute.org/pge-failing-california/ https://ciceroinstitute.org/pge-failing-california/

sillystuff 3y ago

California was the leader in deregulation of their electric utilities. AB1890 was passed in 1996 deregulating California's electricity sector. The '90s deregulation directly led to an 800% increase in wholesale electricity prices in 2000, and rolling blackouts for customers of investor owned utilities like SDGE (San Diego) and PGE (Central/Northern California). The government owned utilities, like LADWP (serving the Los Angeles area) did not need to resort to rolling blackouts (zero blackouts), and currently have much lower rates* while being fully sustained by the rate payers (not having the parasitic "investors" demanding greater profits allows for proper long-term planning and significantly lower prices for the rate payers). * Average $0.26/kWh LADWP. Average $0.45/kWh PGE

gotoeleven 3y ago
Wait Im confused, if PG&E is deregulated then how come the legislature can pass a law to require income-based billing? What exactly do you mean by deregulated?
- danans 3y ago
  The wholesale electrical energy markets in California are deregulated. As a consumer, you might buy retail electrical energy, transmission and distribution from an investor owned utility like PG&E, which is regulated by the California Public Utilities Commission.
  - analyte123 3y ago
    An appropriate analogy for this would be where wholesale beef markets were "deregulated", but the state government put in a program that allowed approximately half the state's population to get vouchers for a 35% discount on beef, driving up the price for everyone else (the CARE program). And the state government mandated grocers and restaurants buy certified organic regenerative beef for at least 50% of the beef they sell (the renewable requirement).
    - danans 3y ago
      You are leaving out some very important things: - Price stability itself has a value for electricity consumers. Insulating consumers from the price variations that come from the inherent variability in supply and demand is a major "feature" of retail electric service. While one could provide their own stability with enough personal batteries and generators, practically that's only really possible for the wealthy. - Lack of regulation around planning, upkeep, maintenance, and backup planning results in short-term profit maximization among generators (and cost minimization among consumers who enjoy very low electric rates in the short term) leads to situations like the catastrophic Texas outages of 2021. Now that Texas has legislated price-caps (which is direct economic regulation) [1], typical rates will rise. 1. https://www.texastribune.org/2023/05/22/texas-electricity-power-plants-performance-credits-bill/ https://www.texastribune.org/2023/05/22/texas-electricity-po...

7thaccount 3y ago

California was one of the first to move to a wholesale electricity market. The only problem was they didn't have provisions to take care of gaming and market power and ENRON figured out how to make millions upon millions from it. Since then, all the wholesale electricity markets in the US have to have market monitors that look for these kinds of abuses and have authority to fix. There are certainly still major issues with the designs, but we shouldn't have another problem like what California had in the early 2000s.