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Natural monopolies benefit from scale. For water you need treatment and then sewage. Unless you can pump ground water there and then, you facilities are cheaper
by Ekaros 2y ago
Natural monopolies benefit from scale. For water you need treatment and then sewage. Unless you can pump ground water there and then, you facilities are cheaper per unit when they scale up at least to certain point.
So for same continuous geographical area having single water utility is lot of sense.
Same mostly goes for power.
With internet, the actual infra is so small and affordable that only the last bit to consumer is expensive per unit. So in sanely operated markets you can have multiple operators at same time and competition works.
- bradchris 2y agoYup, I get the economies of scale, hence why I wonder why we don’t use statewide utilities for more rural areas and municipal utilities for denser metro areas that support it (e.g. LADWP for Los Angeles). But even if you have a private company capitalize on these efficiencies of scale, there’s no competition to force them to do anything other than the bare minimum (“provide this utility, today, above some bare minimum acceptability standard that doesn’t cause the state to nationalize is” with barely an afterthought toward what maintenance capex looks down the line), and even then Edison and PG&E still can’t hop over the low bar they set for themselves.
- Ekaros 2y agoI think best balance is private company majority or wholly owned by local or higher government. Sadly such companies are easy sells to fund budget shortfalls for year or two. And failures are only seen when those elected are out.