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This is quite editorialized. A different way of putting this is that the government has reduced solar subsidies (reduced rates for excess) and won't be passing

This is quite editorialized. A different way of putting this is that the government has reduced solar subsidies (reduced rates for excess) and won't be passing a bunch of new restrictions on the industry. These sound like good things. Let the market work.

CaliforniaKarl 2y ago
> This is quite editorialized. Well, yeah. It's an article in the "Opinion // Editorials" section, by the paper's Editorial Board.
jfengel 2y ago
The environment is an enormous externality that throws off market mechanisms.
- robertlagrant 2y ago
  How's that relevant here?
  - et-al 2y ago
    > Let the market work [by undervaluing environmental costs]
jedberg 2y ago
> Let the market work. That would be great if it worked both ways. I don't have a choice, I have to use PG&E. They have no incentive to lower prices when their energy prices drop. The point of all those regulations is to force them to pass on their savings to consumers who have no choice in energy provider. If we have so much solar generation during summer, why isn't my energy free or nearly so? If the market worked correctly, they would be paying me to use energy in the summer. But instead PG&Es profits get to go up, because I have no choice but to use PG&E.
- s1artibartfast 2y ago
  They already have a profit cap at 10% of revenue. They have every incentive to drive their own costs as high as possible
  - iamtheworstdev 2y ago
    if profit is capped at 10% of revenue then it sounds like the incentive is to raise revenue, not lower expenses.
    - dumbfounder 2y ago
      That's what s1artibartfast is saying. They want things to be very expensive because that's how they make the most money. Lowering expenses means they need to lower their prices which lowers their revenues which lowers their profits.
    - InitialLastName 2y ago
      If it costs $90 to deliver a day's energy to a customer, they can charge $100, making $10 profit per customer-day. If it costs $900 to deliver a day's energy to a customer, they can charge $1000, making $100 profit per customer-day. Where is the incentive to reduce expenses if the only way you can raise profit is by raising expenses?
    - s1artibartfast 2y ago
      Indeed. The same is true of healthcare insurance in the US. The Affordable Care Act instituted an 80/20% rule for insurers. Naturally, the best way to increase profit is to drive up the cost of healthcare.
    - ghouse 2y ago
      I do not believe that this is accurate. California Investor Owned Utilities (IOUs) have had their profit decoupled from revenue since 1981. [0] The Federal Energy Regulatory Commission (FERC) allows for an equity rate of return on assets of approx 10% (9.3). [1] As a result, California IOUs don't have an incentive to sell more power, but do have an economic incentive to build more assets. Asset construction is driven by growing peak demand. Or under-investment in O&M. [0] https://www.sciencedirect.com/science/article/abs/pii/S0957178796000124 https://www.sciencedirect.com/science/article/abs/pii/S09571... [1] https://www.utilitydive.com/news/ferc-lowers-pge-transmission-returns-roe-consumer/620869/ https://www.utilitydive.com/news/ferc-lowers-pge-transmissio...
axus 2y ago
It's some kind of market, but not a free one.
darth_avocado 2y ago
>Let the market work Funny how that only works when I borrow the energy from the grid, but not when I’m adding energy to the grid.
- richwater 2y ago
  Maintenance costs are more important than whatever minuscule percentage you add to the grid and maintenance costs are averaged out by everyone paying. The cost of infrastructure doesn't change if you're consuming power 2h/day or 24/day.
  - darth_avocado 2y ago
    Sure. No one is asking for that amount though. Every utility bill has the breakdown of the costs. Just pay me the per unit cost listed in the “generation” part of the utility bill. I’m pretty sure even then, I’d be at a disadvantage, assuming PG&E would have a lower cost advantage in generating electricity in bulk.
hot_gril 2y ago
It's so editorialized that I had to stop reading it. If it just told me what changed, I'd be interested.

CaliforniaKarl 2y ago

> This is quite editorialized. Well, yeah. It's an article in the "Opinion // Editorials" section, by the paper's Editorial Board.

jfengel 2y ago

The environment is an enormous externality that throws off market mechanisms.

robertlagrant 2y ago
How's that relevant here?
- et-al 2y ago
  > Let the market work [by undervaluing environmental costs]

jedberg 2y ago

> Let the market work. That would be great if it worked both ways. I don't have a choice, I have to use PG&E. They have no incentive to lower prices when their energy prices drop. The point of all those regulations is to force them to pass on their savings to consumers who have no choice in energy provider. If we have so much solar generation during summer, why isn't my energy free or nearly so? If the market worked correctly, they would be paying me to use energy in the summer. But instead PG&Es profits get to go up, because I have no choice but to use PG&E.

s1artibartfast 2y ago
They already have a profit cap at 10% of revenue. They have every incentive to drive their own costs as high as possible
- iamtheworstdev 2y ago
  if profit is capped at 10% of revenue then it sounds like the incentive is to raise revenue, not lower expenses.
  - dumbfounder 2y ago
    That's what s1artibartfast is saying. They want things to be very expensive because that's how they make the most money. Lowering expenses means they need to lower their prices which lowers their revenues which lowers their profits.
  - InitialLastName 2y ago
    If it costs $90 to deliver a day's energy to a customer, they can charge $100, making $10 profit per customer-day. If it costs $900 to deliver a day's energy to a customer, they can charge $1000, making $100 profit per customer-day. Where is the incentive to reduce expenses if the only way you can raise profit is by raising expenses?
  - s1artibartfast 2y ago
    Indeed. The same is true of healthcare insurance in the US. The Affordable Care Act instituted an 80/20% rule for insurers. Naturally, the best way to increase profit is to drive up the cost of healthcare.
  - ghouse 2y ago
    I do not believe that this is accurate. California Investor Owned Utilities (IOUs) have had their profit decoupled from revenue since 1981. [0] The Federal Energy Regulatory Commission (FERC) allows for an equity rate of return on assets of approx 10% (9.3). [1] As a result, California IOUs don't have an incentive to sell more power, but do have an economic incentive to build more assets. Asset construction is driven by growing peak demand. Or under-investment in O&M. [0] https://www.sciencedirect.com/science/article/abs/pii/S0957178796000124 https://www.sciencedirect.com/science/article/abs/pii/S09571... [1] https://www.utilitydive.com/news/ferc-lowers-pge-transmission-returns-roe-consumer/620869/ https://www.utilitydive.com/news/ferc-lowers-pge-transmissio...

axus 2y ago

It's some kind of market, but not a free one.

darth_avocado 2y ago

>Let the market work Funny how that only works when I borrow the energy from the grid, but not when I’m adding energy to the grid.

richwater 2y ago
Maintenance costs are more important than whatever minuscule percentage you add to the grid and maintenance costs are averaged out by everyone paying. The cost of infrastructure doesn't change if you're consuming power 2h/day or 24/day.
- darth_avocado 2y ago
  Sure. No one is asking for that amount though. Every utility bill has the breakdown of the costs. Just pay me the per unit cost listed in the “generation” part of the utility bill. I’m pretty sure even then, I’d be at a disadvantage, assuming PG&E would have a lower cost advantage in generating electricity in bulk.

hot_gril 2y ago

It's so editorialized that I had to stop reading it. If it just told me what changed, I'd be interested.