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A company that makes birthday party banners that fails can be replaced. If your electric company runs itself into the ground, there is no replacement without go

A company that makes birthday party banners that fails can be replaced. If your electric company runs itself into the ground, there is no replacement without government assistance. So why add the overhead of a for profit company?

esafak 2y ago
The last mile might be monopolized, but you are oversimplifying it. When implemented well, there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. Every system has bottlenecks. This does not mean they are all equally resilient. To give a familiar example, your having one brain does not negate the benefit of having limbs in pairs.
- sbarre 2y ago
  > When implemented well Here's the important part. Regulatory capture and monopolies don't want or need things to be implemented well, because that leads to alternative options.
  - esafak 2y ago
    That is true of any complex endeavor. People have to do their jobs properly, and the system should be set up with consideration. There are no shortcuts to success. Policy needs to be bulwarked against the problems you mentioned.
- IgorPartola 2y ago
  I live in CT where most of the power is supplied by Eversource. Whenever there is a big storm that knocks out power (happens every few years) to most of the state they are never prepared even though they are mandated every time to prepare more than the last time. And after they restore the power the delivery charge goes up. At this point the delivery charge is more than half the cost and our electricity is north of $0.30 per kWh and keeps going up. Even if you switch generation companies your cost doesn’t actually go down significantly overall due to the delivery charges. Moreover, Eversource has their hands in any solar projects. They drag out the process to approve any installations and fight you tooth and nail to make sure you can’t install a big enough system because they are mandated to buy electricity at the same rate as they sell it. They fully captured the market and are essential to the state’s functioning so whenever there is an issue the government backs them. When there isn’t, they post billions in profits. What part of that sounds correct to you?
- sgarland 2y ago
  There are partial markets at best. There is generally a single owner of the physical infrastructure for transmission and distribution. Also, don’t forget that the FCC forced utilities into in the 70s to allow telecoms to hang cable off of their poles; the utilities certainly had no incentive to do so at a fair rate.
- troupo 2y ago
  > there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. No, there are not. You can't have 15 different companies running 15 different cables over 15 different sets of electric poles into a house, each competing on delivery of electricity (or water, or sewage, or...). Well, you can, but there's nothing good or efficient about it.
  - HideousKojima 2y ago
    Did you not read the first sentence of the post you're replying to?
    - troupo 2y ago
      > The last mile might be monopolized, but you are oversimplifying it. When implemented well, there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. First you claim oversimplification and then you write a sentence that feels like a "but when implemented well". Tell me how this is a market in a reasonably sized city, and how many parallel electric lines, water and sewer pipes you can run for the market to be well implemented? Bonus question: how many competing power lines can be run from a single power plant? 1? 2? 10?
psychlops 2y ago
Private companies are funded by willing participants and have economic incentives to be efficient. The incentives for your electric company and other government programs for efficiency are not nearly so clear. It seems reasonable to favor efficiency wherever possible.
- plagiarist 2y ago
  Private companies have economic incentives to charge as much as they can get away with and pass that excess to the owners of the company. This includes participating in collusion with peers and regulatory capture to artificially raise the rate in the market far beyond what efficiency would dictate. Private companies are inefficient by definition when individuals are able to extract millions to billions of dollars from the market.
  - psychlops 2y ago
    I agree, except with your last sentence. There are many examples of efficient organizations that extract billions from the market from willing participants.
    - plagiarist 2y ago
      What sort of definition of efficiency are you operating with? A system is not efficient if billions of dollars are "evaporating" out of the system. Yes, the participants of those markets are various degrees of willingness. No, I do not agree that makes them efficient.
      - mindslight 2y ago
        Computational complexity theorists hate this one simple trick! NP hard is a lie! You just have to assert that a given problem has been optimally computed. We all know that physics obeys the whims of politics. </s> It's especially ironic because if markets actually worked the way the "free market" dogma supposes they do, central planning would also work.
  - 2y ago
spwa4 2y ago
Because a million things can be replaced. An electricity company can use private contractors (either individual or with lots of small regional companies) for maintenance, build, diagnosing, private power plants, ... and these can fail and be replaced independently, even if the power company as a whole cannot.
- nonchalantsui 2y ago
  Each one of those “independent” points that can potentially fail is just added dependencies that increases inefficiency due do increased oversight, adds more red tape, and slows down production.
- mindslight 2y ago
  A municipal electric company can use private contractors just the same. The difference is that the municipal electric company is accountable to the captive residents they serve, while a privately-owned monopoly escapes most accountability.
  - spwa4 2y ago
    And the whole issue is that this accountability is generally used by a group of people that make it serve different issues. Municipalities use it like a way to raise taxes to do what they want to do (like a work program, a way to pay pensions for municipal workers, ...) Of course a privately-owned one doesn't work either, because there's no competition.

esafak 2y ago

The last mile might be monopolized, but you are oversimplifying it. When implemented well, there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. Every system has bottlenecks. This does not mean they are all equally resilient. To give a familiar example, your having one brain does not negate the benefit of having limbs in pairs.

sbarre 2y ago
> When implemented well Here's the important part. Regulatory capture and monopolies don't want or need things to be implemented well, because that leads to alternative options.
- esafak 2y ago
  That is true of any complex endeavor. People have to do their jobs properly, and the system should be set up with consideration. There are no shortcuts to success. Policy needs to be bulwarked against the problems you mentioned.
IgorPartola 2y ago
I live in CT where most of the power is supplied by Eversource. Whenever there is a big storm that knocks out power (happens every few years) to most of the state they are never prepared even though they are mandated every time to prepare more than the last time. And after they restore the power the delivery charge goes up. At this point the delivery charge is more than half the cost and our electricity is north of $0.30 per kWh and keeps going up. Even if you switch generation companies your cost doesn’t actually go down significantly overall due to the delivery charges. Moreover, Eversource has their hands in any solar projects. They drag out the process to approve any installations and fight you tooth and nail to make sure you can’t install a big enough system because they are mandated to buy electricity at the same rate as they sell it. They fully captured the market and are essential to the state’s functioning so whenever there is an issue the government backs them. When there isn’t, they post billions in profits. What part of that sounds correct to you?
sgarland 2y ago
There are partial markets at best. There is generally a single owner of the physical infrastructure for transmission and distribution. Also, don’t forget that the FCC forced utilities into in the 70s to allow telecoms to hang cable off of their poles; the utilities certainly had no incentive to do so at a fair rate.
troupo 2y ago
> there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. No, there are not. You can't have 15 different companies running 15 different cables over 15 different sets of electric poles into a house, each competing on delivery of electricity (or water, or sewage, or...). Well, you can, but there's nothing good or efficient about it.
- HideousKojima 2y ago
  Did you not read the first sentence of the post you're replying to?
  - troupo 2y ago
    > The last mile might be monopolized, but you are oversimplifying it. When implemented well, there are markets for generation, transmission, distribution, and retail, implying alternatives and resiliency. First you claim oversimplification and then you write a sentence that feels like a "but when implemented well". Tell me how this is a market in a reasonably sized city, and how many parallel electric lines, water and sewer pipes you can run for the market to be well implemented? Bonus question: how many competing power lines can be run from a single power plant? 1? 2? 10?

psychlops 2y ago

Private companies are funded by willing participants and have economic incentives to be efficient. The incentives for your electric company and other government programs for efficiency are not nearly so clear. It seems reasonable to favor efficiency wherever possible.

plagiarist 2y ago
Private companies have economic incentives to charge as much as they can get away with and pass that excess to the owners of the company. This includes participating in collusion with peers and regulatory capture to artificially raise the rate in the market far beyond what efficiency would dictate. Private companies are inefficient by definition when individuals are able to extract millions to billions of dollars from the market.
- psychlops 2y ago
  I agree, except with your last sentence. There are many examples of efficient organizations that extract billions from the market from willing participants.
  - plagiarist 2y ago
    What sort of definition of efficiency are you operating with? A system is not efficient if billions of dollars are "evaporating" out of the system. Yes, the participants of those markets are various degrees of willingness. No, I do not agree that makes them efficient.
    - mindslight 2y ago
      Computational complexity theorists hate this one simple trick! NP hard is a lie! You just have to assert that a given problem has been optimally computed. We all know that physics obeys the whims of politics. </s> It's especially ironic because if markets actually worked the way the "free market" dogma supposes they do, central planning would also work.
- 2y ago

spwa4 2y ago

Because a million things can be replaced. An electricity company can use private contractors (either individual or with lots of small regional companies) for maintenance, build, diagnosing, private power plants, ... and these can fail and be replaced independently, even if the power company as a whole cannot.

nonchalantsui 2y ago
Each one of those “independent” points that can potentially fail is just added dependencies that increases inefficiency due do increased oversight, adds more red tape, and slows down production.
mindslight 2y ago
A municipal electric company can use private contractors just the same. The difference is that the municipal electric company is accountable to the captive residents they serve, while a privately-owned monopoly escapes most accountability.
- spwa4 2y ago
  And the whole issue is that this accountability is generally used by a group of people that make it serve different issues. Municipalities use it like a way to raise taxes to do what they want to do (like a work program, a way to pay pensions for municipal workers, ...) Of course a privately-owned one doesn't work either, because there's no competition.