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I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the bi

by rmason 2y ago

I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the big power company in the state would try and get the city to sell them the utility. After I moved a city council for whatever reason ended up selling. As a result the cost of electricity immediately doubled and power outages occurred regularly due to reduced maintenance. I don't know what they spent the money on that they received but it was a very poor decision that I have to believe they regret.

tmnvix 2y ago
Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political economy is almost entirely focused on ensuring that everything that can be sold to private entities (read, the market) is. In this ideology the sale would be viewed as a success regardless of any practical downsides.
- Ekaros 2y ago
  I think this is just the end-stage failures of social democracies. Fund the things now, even if it means selling anything that can generate slight profits in long term. Or provide basic services at reasonable rates. Eventually everything is sold and out sourced, money has been wasted on buying votes and the debt is maxed out. Then the system will fail...
  - treyd 2y ago
    It's the end state of neoliberal policies. That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.
    - jopsen 2y ago
      Sure, they do we're just not as far along the curve! That said, who is to say the trend isn't reversible some day. Also let's not forget the selling to private operators does provide benefits, not always, it's not the magic fix we pretend it is.
    - SoftTalker 2y ago
      They’ve really only existed since the end of WWII and were rescued from that war by the U S so not really enough time to judge.
    - animal_spirits 2y ago
      I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to compete. There are no competitive forces; there is no market. Publicly run institutions or privately run+ publicly regulated institutions better serve the needs of the people in these conditions.
      - forgetfreeman 2y ago
        I think a related thing that many people get confused by is the idea that market forces even exist. It's very rare these days to find industry segments where participants actively compete on quality or price. The whole idea is a holdover from how business was done 40 years ago.
        _DeadFred_ 2y ago
        And with today's investors just buying funds/picking some 'group' on the 401k website, they aren't investing in a company, counting on receiving dividends from the company for the rest of their lives, and therefore forcing the company to be healthy. Instead they are counting on the stock going up short term, something totally different than buying and holding for dividends. And they just keep putting money into the generic pools of XYZ stock fund, again not a specific stock that they then hold accountable for anything. In fact they can't even punish a specific company by selling it's stock, only an entire ETF or 401 fund that the company is buried in. And then there's dark pools. Trading isn't even done on the market anymore.
  - dartos 2y ago
    Selling almost any state function to a private entity is almost the opposite of what social democrats want to do… I think you mean neoliberal democracies.
- ksec 2y ago
  >In this ideology the sale would be viewed as a success regardless of any practical downsides. In other places on earth, selling public utility requires the company to operate at similar or better level of services previously provided while retaining the cost. And those deals are mostly regulated, penalties when not meeting them. And it used to be, may be in rare cases the people in Government making those deals actually knows what they are getting out of it, so the contract are all well written. Now it seems they are selling because 1. They dont have money. 2. They are running it poorly. 3. They are bribed or have incentives to sell it. All with no caring of how the people they serve were getting any good value out of it.
  - econ 2y ago
    I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng
    - philjohn 2y ago
      Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.
      - ksec 2y ago
        It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...
- cscurmudgeon 2y ago
  Don’t blame this on the market. A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.
  - LtWorf 2y ago
    A true market doesn't exist.
  - DrillShopper 2y ago
    > A true market won’t have a heavy handed regulator in bed with a govt approved monopoly. So the only way to have a true market is to count on the opposite of human greed. Well hopefully that works out.
- fransje26 2y ago
  > but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. They possibly even managed to buy a luxury car in the years that followed. Or went on holiday more often. Or somehow unexpectedly landed a nice and cush job at said energy company.
johngladtj 2y ago
That's not how the power grid works
- ericmay 2y ago
  How does it work in relation to the person you replied to? Genuinely asking.
  - deleted 2y ago
    [deleted]
  - mattmaroon 2y ago
    Power companies in almost all cases don't supply power directly to homes. They supply it to the grid, and the grid supplies to homes. In states that are de-regulated, you pick your power company, you don't pick the servicer, and both charge you a fee. You pay one fee to the generator, one to the grid operator. (It may be rolled into one bill, but it could be going two separate places). The generator must sell to the grid power equal to what it sells. I'd guess what happened is this small town generated power and let its people buy it at a reduced rate. GP just didn't get into that level of detail.
    - massysett 2y ago
      Excellent explanation of all this: https://youtu.be/sH1PVVJuBtE?si=EK4-rmq4CUxw0ttU https://youtu.be/sH1PVVJuBtE?si=EK4-rmq4CUxw0ttU
pclmulqdq 2y ago
It sounds like your city was overprovisioned in terms of how much electricity they could supply, and you had the benefit of the cheapest power around (hydroelectric power is very cheap), so when you got plugged into the wider network that the power company was servicing, you got screwed. There's a good chance that power for neighboring towns got cheaper and/or more reliable after the deal given what happened with your power. The town must have either been in huge financial trouble or on a privatization kick.
- sidewndr46 2y ago
  its extremely unlikely that a town in Michigan was not connected to the Eastern grid
  - pclmulqdq 2y ago
    Whether they were connected and whether they were selling the power are two different questions.
- s1mplicissimus 2y ago
  Your conclusion is a false dichotomy. A third option is that shareholders of the private company fattened up their profit margins.
- maxerickson 2y ago
  One potential reason I can come up with is the dam aging and becoming a liability. The town may also have been putting other revenues towards the electric utility (so losing money on the service and billing). It was probably just a mistake though. My town charges about $0.11 per kwh, with a fixed monthly service fee making the effective rate for a small user closer to $0.20.
  - fooqux 2y ago
    I think you're spot on. Damn failures are on the rise, and usually it's due to the simple fact that maintenance is expensive and everything has a shelf life. A lot of these dams were built during the same time period and the cost to replace / maintain the aging infrastructure is tough for small communities to swallow. And they're all coming due at roughly the same time. Selling to a larger company who hopefully has the capital to fix them seems like a bargain when compared to the cost of replacing a hydro dam (or even replacing it with a non-electric generating dam). Of course, that does come at a cost, and it's probably spread across all rate payers.
hansvm 2y ago
I've lived in a few dozen cities (most very, very rural) in the US, and The Bay has, by far, the worst electricity out of any of them. We have longer outages as a planned practice than I'd have from ice storms knocking down half the forest or waves partially flooding the town. As an outside observer, the fact that PG&E can lie to the state and request money for maintenance, subsequently sending that money to shareholders, looks like a likely candidate for many of the problems. It's especially annoying that it's the lowest quality power while it's working (compared to a pure sine signal), has the highest count of days with some power blip, the highest number of full days without power each year, it's 2.5x more expensive than anywhere else I've lived, and they don't even have snow or ice or the same levels of wind and rain as the other places with better power. Plus they're servicing more people per square mile. It ought to be more efficient. Maybe CA really is special somehow, but it looks like ordinary corruption.
- krallja 2y ago
  Californians blame it all on Enron, but that can't be the only reason, right?
  - zmgsabst 2y ago
    The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.
    - cinntaile 2y ago
      20-30 years is 1 generation.
      - ahoef 2y ago
        There are genetic generations and cultural generations. I think they mean the cultural generations.
    - mschuster91 2y ago
      The thing is, large scandals can have an aftereffect that lasts for decades. Berlin for example had a massive bank collapse in 2001 under the Conservative government that ended up placing the state of Berlin into billions of euros worth of debt and financial risk. The succeeding SD/Left/Green triplet coalitions had to fire-sell off many state-held assets like the water utility (that ended up a disaster on its own [2]) and especially a huge amount of residential real estate, which is now contributing to the insane rent explosions in Berlin. To this day, Berlin hasn't recovered from all the penny-pinching of the last decades. [1] https://de.wikipedia.org/wiki/Berliner_Bankenskandal https://de.wikipedia.org/wiki/Berliner_Bankenskandal [2] https://de.wikipedia.org/wiki/Berliner_Wasserbetriebe#Streit_um_Rekommunalisierung_und_Angemessenheit_der_Wasserpreise https://de.wikipedia.org/wiki/Berliner_Wasserbetriebe#Streit...
gnopgnip 2y ago
Alameda had municipal internet. In the 2009 financial collapse the city was facing bankruptcy and sold off the internet and cable to comcast. The alternatives weren’t great, the cost of borrowing at the time was high and cutting services is unpopular. The residents benefited from having the infrastructure either way. And this let the city keep municipal power, around half the cost of pg&e.
szundi 2y ago
These politicians are smart enough and can see through the first layer of obvious. They wanted to win the next election and this had nothing to do with that, but the money they could spend on shiny bullshit. Or they just got consulting jobs after losing it, nah, who cares. Was it theirs or what.
hiAndrewQuinn 2y ago
I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about 25% higher. France, well known for its pro-nuke approach, seems to average ~$0.28 per kWh, or about 40% higher. Germany, which has... Not done so, is around $0.40 per kWh, or about twice as high. Even Iceland, famed for its "almost free" geothermal power, seems to average $0.16-0.18 kWh for an ordinary residential connection - one must assume aluminum plants, etc can cut much better deals with the geothermal plants, through strategies like close colocation, of course. These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does. And making electricity cheaper probably benefits human welfare en masse in a huge way. It's a shame power management doesn't seem to be very attractive to recent EE grads like myself since it pays much worse and requires much more credentialing to break into compared to, say, WordPress development.
- Gare 2y ago
  > These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does. It has to be noted that in most EU countries electricity for business is quite cheaper than for households. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php...
  - hiAndrewQuinn 2y ago
    Correct, but this doesn't create as much of a wedge as you might suspect. It's also true in the US that commercial electricity tends to be 20-50% cheaper than the home delivered stuff. In the EU the additional tax burden means the difference is usually closer to 40-70%. Ironically, in this way, you could describe the EU as being far more business-friendly than the United States (by dint of being much more consumer-hostile, but hey). Making the fundamental power generation cheaper is probably still the best lever a private actor can push.
andy_ppp 2y ago
You can extrapolate this to why governments all over the world are effectively bankrupt, if you have no assets and instead rent them back from the rich it's extremely difficult to balance your books and the tax burden will go up forever. No amount of cost cutting will restore all public assets being owned by someone else and rented back at ever increasing costs. https://www.youtube.com/watch?v=II1GOhoNpms https://www.youtube.com/watch?v=II1GOhoNpms
- threeseed 2y ago
  In that video Brexit was not mentioned once. Even though the UK will be £311bn worse off by 2035 because of it [1]. A decision that can't be blamed on the rich but instead is owned by the ordinary voter. Who then demands the same quality of life they had previously with the same taxation levels. It's delusional thinking and unfortunately no one has the political capital nor guts to correct them on it. And it's a very different story here in Australia where none of what you/Gary said is true. The state governments are under financial strain because of huge investments in public transport infrastructure owned by the people. [1] https://news.sky.com/story/brexit-new-report-suggests-uk-311bn-worse-off-by-2035-due-to-leaving-eu-13046256 https://news.sky.com/story/brexit-new-report-suggests-uk-311...
  - andy_ppp 2y ago
    So several problems with infrastructure - the developers always underquote and then once there are overruns the government is locked in and doesn't want to bankrupt the companies making these public infrastructure projects otherwise nobody would ever build anything. Additionally borrowing for infrastructure is often done through public/private partnerships which ends up with private companies owning the infrastructure and payments being made by the government for all sort of things in addition to rent i.e. changing a lightbulb costs £2000 etc. Government tend to get all the downside and the rich (who own the debt and the companies involved in building these projects) tend to see all the upside, look at the utility and train companies in the UK for example, and hospitals under PFI. The money for these projects is provided by the wealthy through the purchase of government bonds. Brexit is a problem sure, nobody denies that, but QE of around £1tn since COVID, most of which ended up with the richest (see asset price increases and cash holdings and world stock markets at all time record levels) is even more of a problem as it makes normal people and tax income relatively even smaller so borrowing and taxes need to be increased. And of course we don't tax the people whose assets have gone up enormously until they sell those assets. Quite often rich people borrow money against those assets instead of realising a capital gains tax event or various other loopholes. I don't know too much about the specific case of transport infrastructure in Australia, but if the government owned them outright without attached debts clearly they would be assets rather than liabilities.
venkat223 2y ago
[flagged]
Affric 2y ago
> “the tax payers are being ripped off as asset owners because once the debt incurred to pay for the energy system is cleared they just give out cheap electricity and don’t seek profit. It is more efficient to sell, reinvest, and then let some massive rent seeker over charge you for something you once owned” The economists who argue for this, only slightly paraphrased.
- crazygringo 2y ago
  I have never heard a serious argument that it is more efficient to sell and reinvest from a finance perspective. The argument is generally that private companies are more productive than public services due to productivity improvements that are forced via competition. There's no such forcing function for a government-provided service, enabling (potential) waste and bloat, depending on governmental competence and oversight. The correct counter-argument is that there needs to be competition for that to happen. If you have only one electric utility for customers to choose from, the argument is totally invalidated.
  - Affric 2y ago
    Here’s [1] a report from the early days of electricity privatisation in NSW. In all honesty it’s been about a decade since I have read it closely but I would say it’s fairly serious and it does like efficiency as a metric. Underproductive though is certainly simpler but my understanding is that it was inefficient because the asset owner charging an equilibrium price should in theory lead to higher overall production (obviously lack of competition hurts this). [1] https://www.parliament.nsw.gov.au/researchpapers/Documents/electricity-and-privatisation/ElectandPriv.pdf https://www.parliament.nsw.gov.au/researchpapers/Documents/e...
ivell 2y ago
Coming from cities in a 3rd world country that had government owned utilities, I would say my experience is the opposite. Usually the government is underfunded, the employees have no motivation and often are not even available to work thanks to their guaranteed jobs. Rampant theft of power and government have no interest to curb it due to vote banks. Unpaid dues by the government to energy producing companies resulting in bankruptcy of those companies. Political parties giving out free power and water to capture votes.
ugh123 2y ago
>but it was a very poor decision that I have to believe they regret Unfortunately, I'm sure the folks that signed that deal were long gone before the problems started setting in
jt2190 2y ago
Why can’t you tell us the name of the town?

by rmason 2y ago

tmnvix 2y ago

Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political economy is almost entirely focused on ensuring that everything that can be sold to private entities (read, the market) is. In this ideology the sale would be viewed as a success regardless of any practical downsides.

Ekaros 2y ago
I think this is just the end-stage failures of social democracies. Fund the things now, even if it means selling anything that can generate slight profits in long term. Or provide basic services at reasonable rates. Eventually everything is sold and out sourced, money has been wasted on buying votes and the debt is maxed out. Then the system will fail...
- treyd 2y ago
  It's the end state of neoliberal policies. That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.
  - jopsen 2y ago
    Sure, they do we're just not as far along the curve! That said, who is to say the trend isn't reversible some day. Also let's not forget the selling to private operators does provide benefits, not always, it's not the magic fix we pretend it is.
  - SoftTalker 2y ago
    They’ve really only existed since the end of WWII and were rescued from that war by the U S so not really enough time to judge.
  - animal_spirits 2y ago
    I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to compete. There are no competitive forces; there is no market. Publicly run institutions or privately run+ publicly regulated institutions better serve the needs of the people in these conditions.
    - forgetfreeman 2y ago
      I think a related thing that many people get confused by is the idea that market forces even exist. It's very rare these days to find industry segments where participants actively compete on quality or price. The whole idea is a holdover from how business was done 40 years ago.
      - _DeadFred_ 2y ago
        And with today's investors just buying funds/picking some 'group' on the 401k website, they aren't investing in a company, counting on receiving dividends from the company for the rest of their lives, and therefore forcing the company to be healthy. Instead they are counting on the stock going up short term, something totally different than buying and holding for dividends. And they just keep putting money into the generic pools of XYZ stock fund, again not a specific stock that they then hold accountable for anything. In fact they can't even punish a specific company by selling it's stock, only an entire ETF or 401 fund that the company is buried in. And then there's dark pools. Trading isn't even done on the market anymore.
- dartos 2y ago
  Selling almost any state function to a private entity is almost the opposite of what social democrats want to do… I think you mean neoliberal democracies.
ksec 2y ago
>In this ideology the sale would be viewed as a success regardless of any practical downsides. In other places on earth, selling public utility requires the company to operate at similar or better level of services previously provided while retaining the cost. And those deals are mostly regulated, penalties when not meeting them. And it used to be, may be in rare cases the people in Government making those deals actually knows what they are getting out of it, so the contract are all well written. Now it seems they are selling because 1. They dont have money. 2. They are running it poorly. 3. They are bribed or have incentives to sell it. All with no caring of how the people they serve were getting any good value out of it.
- econ 2y ago
  I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng
  - philjohn 2y ago
    Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.
    - ksec 2y ago
      It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...
cscurmudgeon 2y ago
Don’t blame this on the market. A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.
- LtWorf 2y ago
  A true market doesn't exist.
- DrillShopper 2y ago
  > A true market won’t have a heavy handed regulator in bed with a govt approved monopoly. So the only way to have a true market is to count on the opposite of human greed. Well hopefully that works out.
fransje26 2y ago
> but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. They possibly even managed to buy a luxury car in the years that followed. Or went on holiday more often. Or somehow unexpectedly landed a nice and cush job at said energy company.

johngladtj 2y ago

That's not how the power grid works

ericmay 2y ago
How does it work in relation to the person you replied to? Genuinely asking.
- deleted 2y ago
  [deleted]
- mattmaroon 2y ago
  Power companies in almost all cases don't supply power directly to homes. They supply it to the grid, and the grid supplies to homes. In states that are de-regulated, you pick your power company, you don't pick the servicer, and both charge you a fee. You pay one fee to the generator, one to the grid operator. (It may be rolled into one bill, but it could be going two separate places). The generator must sell to the grid power equal to what it sells. I'd guess what happened is this small town generated power and let its people buy it at a reduced rate. GP just didn't get into that level of detail.
  - massysett 2y ago
    Excellent explanation of all this: https://youtu.be/sH1PVVJuBtE?si=EK4-rmq4CUxw0ttU https://youtu.be/sH1PVVJuBtE?si=EK4-rmq4CUxw0ttU

pclmulqdq 2y ago

It sounds like your city was overprovisioned in terms of how much electricity they could supply, and you had the benefit of the cheapest power around (hydroelectric power is very cheap), so when you got plugged into the wider network that the power company was servicing, you got screwed. There's a good chance that power for neighboring towns got cheaper and/or more reliable after the deal given what happened with your power. The town must have either been in huge financial trouble or on a privatization kick.

sidewndr46 2y ago
its extremely unlikely that a town in Michigan was not connected to the Eastern grid
- pclmulqdq 2y ago
  Whether they were connected and whether they were selling the power are two different questions.
s1mplicissimus 2y ago
Your conclusion is a false dichotomy. A third option is that shareholders of the private company fattened up their profit margins.
maxerickson 2y ago
One potential reason I can come up with is the dam aging and becoming a liability. The town may also have been putting other revenues towards the electric utility (so losing money on the service and billing). It was probably just a mistake though. My town charges about $0.11 per kwh, with a fixed monthly service fee making the effective rate for a small user closer to $0.20.
- fooqux 2y ago
  I think you're spot on. Damn failures are on the rise, and usually it's due to the simple fact that maintenance is expensive and everything has a shelf life. A lot of these dams were built during the same time period and the cost to replace / maintain the aging infrastructure is tough for small communities to swallow. And they're all coming due at roughly the same time. Selling to a larger company who hopefully has the capital to fix them seems like a bargain when compared to the cost of replacing a hydro dam (or even replacing it with a non-electric generating dam). Of course, that does come at a cost, and it's probably spread across all rate payers.

hansvm 2y ago

I've lived in a few dozen cities (most very, very rural) in the US, and The Bay has, by far, the worst electricity out of any of them. We have longer outages as a planned practice than I'd have from ice storms knocking down half the forest or waves partially flooding the town. As an outside observer, the fact that PG&E can lie to the state and request money for maintenance, subsequently sending that money to shareholders, looks like a likely candidate for many of the problems. It's especially annoying that it's the lowest quality power while it's working (compared to a pure sine signal), has the highest count of days with some power blip, the highest number of full days without power each year, it's 2.5x more expensive than anywhere else I've lived, and they don't even have snow or ice or the same levels of wind and rain as the other places with better power. Plus they're servicing more people per square mile. It ought to be more efficient. Maybe CA really is special somehow, but it looks like ordinary corruption.

krallja 2y ago
Californians blame it all on Enron, but that can't be the only reason, right?
- zmgsabst 2y ago
  The Enron scandal was 24 years ago, which is a generation ago — almost two. I’d guess the problem is more endemic to their political system.
  - cinntaile 2y ago
    20-30 years is 1 generation.
    - ahoef 2y ago
      There are genetic generations and cultural generations. I think they mean the cultural generations.
  - mschuster91 2y ago
    The thing is, large scandals can have an aftereffect that lasts for decades. Berlin for example had a massive bank collapse in 2001 under the Conservative government that ended up placing the state of Berlin into billions of euros worth of debt and financial risk. The succeeding SD/Left/Green triplet coalitions had to fire-sell off many state-held assets like the water utility (that ended up a disaster on its own [2]) and especially a huge amount of residential real estate, which is now contributing to the insane rent explosions in Berlin. To this day, Berlin hasn't recovered from all the penny-pinching of the last decades. [1] https://de.wikipedia.org/wiki/Berliner_Bankenskandal https://de.wikipedia.org/wiki/Berliner_Bankenskandal [2] https://de.wikipedia.org/wiki/Berliner_Wasserbetriebe#Streit_um_Rekommunalisierung_und_Angemessenheit_der_Wasserpreise https://de.wikipedia.org/wiki/Berliner_Wasserbetriebe#Streit...

gnopgnip 2y ago

Alameda had municipal internet. In the 2009 financial collapse the city was facing bankruptcy and sold off the internet and cable to comcast. The alternatives weren’t great, the cost of borrowing at the time was high and cutting services is unpopular. The residents benefited from having the infrastructure either way. And this let the city keep municipal power, around half the cost of pg&e.

szundi 2y ago

These politicians are smart enough and can see through the first layer of obvious. They wanted to win the next election and this had nothing to do with that, but the money they could spend on shiny bullshit. Or they just got consulting jobs after losing it, nah, who cares. Was it theirs or what.

hiAndrewQuinn 2y ago

I always like to put numbers to things. To put some numbers to this, the average residential rates for electricity in modern-day MI is around ~$0.20 per kWh. Louisiana appears to be one of the cheapest states in this regard, averaging around $0.12 per kWh. As a selfish comparison point, the average residential rate for Finland, an EU country known for its recent nuclear developments (great!), is ~$0.25 per kWh, about 25% higher. France, well known for its pro-nuke approach, seems to average ~$0.28 per kWh, or about 40% higher. Germany, which has... Not done so, is around $0.40 per kWh, or about twice as high. Even Iceland, famed for its "almost free" geothermal power, seems to average $0.16-0.18 kWh for an ordinary residential connection - one must assume aluminum plants, etc can cut much better deals with the geothermal plants, through strategies like close colocation, of course. These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does. And making electricity cheaper probably benefits human welfare en masse in a huge way. It's a shame power management doesn't seem to be very attractive to recent EE grads like myself since it pays much worse and requires much more credentialing to break into compared to, say, WordPress development.

Gare 2y ago
> These are very important factors to keep in mind, even if the absolute numbers seem small. Expensive electricity makes everything else more expensive as well. It touches every facet of our lives in a way not even food does. It has to be noted that in most EU countries electricity for business is quite cheaper than for households. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Electricity_price_statistics https://ec.europa.eu/eurostat/statistics-explained/index.php...
- hiAndrewQuinn 2y ago
  Correct, but this doesn't create as much of a wedge as you might suspect. It's also true in the US that commercial electricity tends to be 20-50% cheaper than the home delivered stuff. In the EU the additional tax burden means the difference is usually closer to 40-70%. Ironically, in this way, you could describe the EU as being far more business-friendly than the United States (by dint of being much more consumer-hostile, but hey). Making the fundamental power generation cheaper is probably still the best lever a private actor can push.

andy_ppp 2y ago

You can extrapolate this to why governments all over the world are effectively bankrupt, if you have no assets and instead rent them back from the rich it's extremely difficult to balance your books and the tax burden will go up forever. No amount of cost cutting will restore all public assets being owned by someone else and rented back at ever increasing costs. https://www.youtube.com/watch?v=II1GOhoNpms https://www.youtube.com/watch?v=II1GOhoNpms

threeseed 2y ago
In that video Brexit was not mentioned once. Even though the UK will be £311bn worse off by 2035 because of it [1]. A decision that can't be blamed on the rich but instead is owned by the ordinary voter. Who then demands the same quality of life they had previously with the same taxation levels. It's delusional thinking and unfortunately no one has the political capital nor guts to correct them on it. And it's a very different story here in Australia where none of what you/Gary said is true. The state governments are under financial strain because of huge investments in public transport infrastructure owned by the people. [1] https://news.sky.com/story/brexit-new-report-suggests-uk-311bn-worse-off-by-2035-due-to-leaving-eu-13046256 https://news.sky.com/story/brexit-new-report-suggests-uk-311...
- andy_ppp 2y ago
  So several problems with infrastructure - the developers always underquote and then once there are overruns the government is locked in and doesn't want to bankrupt the companies making these public infrastructure projects otherwise nobody would ever build anything. Additionally borrowing for infrastructure is often done through public/private partnerships which ends up with private companies owning the infrastructure and payments being made by the government for all sort of things in addition to rent i.e. changing a lightbulb costs £2000 etc. Government tend to get all the downside and the rich (who own the debt and the companies involved in building these projects) tend to see all the upside, look at the utility and train companies in the UK for example, and hospitals under PFI. The money for these projects is provided by the wealthy through the purchase of government bonds. Brexit is a problem sure, nobody denies that, but QE of around £1tn since COVID, most of which ended up with the richest (see asset price increases and cash holdings and world stock markets at all time record levels) is even more of a problem as it makes normal people and tax income relatively even smaller so borrowing and taxes need to be increased. And of course we don't tax the people whose assets have gone up enormously until they sell those assets. Quite often rich people borrow money against those assets instead of realising a capital gains tax event or various other loopholes. I don't know too much about the specific case of transport infrastructure in Australia, but if the government owned them outright without attached debts clearly they would be assets rather than liabilities.

venkat223 2y ago

[flagged]

Affric 2y ago

> “the tax payers are being ripped off as asset owners because once the debt incurred to pay for the energy system is cleared they just give out cheap electricity and don’t seek profit. It is more efficient to sell, reinvest, and then let some massive rent seeker over charge you for something you once owned” The economists who argue for this, only slightly paraphrased.

crazygringo 2y ago
I have never heard a serious argument that it is more efficient to sell and reinvest from a finance perspective. The argument is generally that private companies are more productive than public services due to productivity improvements that are forced via competition. There's no such forcing function for a government-provided service, enabling (potential) waste and bloat, depending on governmental competence and oversight. The correct counter-argument is that there needs to be competition for that to happen. If you have only one electric utility for customers to choose from, the argument is totally invalidated.
- Affric 2y ago
  Here’s [1] a report from the early days of electricity privatisation in NSW. In all honesty it’s been about a decade since I have read it closely but I would say it’s fairly serious and it does like efficiency as a metric. Underproductive though is certainly simpler but my understanding is that it was inefficient because the asset owner charging an equilibrium price should in theory lead to higher overall production (obviously lack of competition hurts this). [1] https://www.parliament.nsw.gov.au/researchpapers/Documents/electricity-and-privatisation/ElectandPriv.pdf https://www.parliament.nsw.gov.au/researchpapers/Documents/e...

ivell 2y ago

Coming from cities in a 3rd world country that had government owned utilities, I would say my experience is the opposite. Usually the government is underfunded, the employees have no motivation and often are not even available to work thanks to their guaranteed jobs. Rampant theft of power and government have no interest to curb it due to vote banks. Unpaid dues by the government to energy producing companies resulting in bankruptcy of those companies. Political parties giving out free power and water to capture votes.

ugh123 2y ago

>but it was a very poor decision that I have to believe they regret Unfortunately, I'm sure the folks that signed that deal were long gone before the problems started setting in

jt2190 2y ago

Why can’t you tell us the name of the town?