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.
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.
Power bills increased after switching to community generated power.
I’d guess the problem is more endemic to their political system.
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.
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.
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
I think you mean neoliberal democracies.
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.
So the only way to have a true market is to count on the opposite of human greed.
Well hopefully that works out.
A healthy debt to GDP ratio (like what the USA has) is integral for a growing economy. Choke on it Austrians.
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-311...
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.
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.
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...
Making the fundamental power generation cheaper is probably still the best lever a private actor can push.
Huh? More like 11-17c/kWh.
- Average spot price for 2024 was less than 6c/kwh https://www.nodesk.fi/sahkon-keskihinta-2024/
- Transmission costs are around 2-6c/kwh https://sahkokuningas.fi/sahkon-siirtohinta/
- Taxes bit less than 3c/kWh
Even if you add all those up, you only get max 15c/kWh.
As of today, you can get 2 year fixed price for less than 8c/kWh, even with that it only adds up to 17c/kWh, with most expensive transmission costs, taxes rounded up and energy price rounded up.
Nuclear energy has contributed to the cheap price, but so has wind power https://www.talouselama.fi/uutiset/te/bfe4f5f4-0329-4cfe-989...
The town must have either been in huge financial trouble or on a privatization kick.
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.
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.
The economists who argue for this, only slightly paraphrased.
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.
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/e...
Unfortunately, I'm sure the folks that signed that deal were long gone before the problems started setting in
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.
The article hedges against someone pointing this out by admitting that Walnut Creek is an unusually optimistic location and that PG&E is also recognizing large expenses related to ongoing infrastructure buildouts, but no solutions are offered for these caveats.
The hidden problem with projects like this is that once you roll these utilities into the city’s budget it’s too tempting to start dipping into taxpayer funds for needed improvements rather than raising electricity rates. When problems arise, politicians try to kick it down the road so it becomes their successor’s problem, or they try to offload the expense onto a growing debt load because that delays the problem to the next generation. It becomes easier to keep the highly visible rate down, but taxes might go up to cover the infrastructure costs instead.
So I’m skeptical. If there was an analysis that showed a drop in rates that was not 3X higher than the profit margins of the private utility I’d be more open to the idea, but as presented this feels like back of the envelope math that generates savings by ignoring all the details that didn’t make their way onto the envelope.
This is addressed right at the beginning of the article. The argument is not that PG&E is skimming off huge profits, rather that it is structurally inefficient:
> Distribution: How much to get the power from your local substation to your house over local power lines. In PG&E's rate chart, they charge 20 cents per kilowatt hour for this. That just does not match up with how much it actually costs them to transmit power over local lines and keep the lines maintained.
> Everything else: Operations, maintenance, profit. This is where PG&E is actually seeing large expenses, because their coverage area is massive, it costs a lot of money to deliver power to rural customers, and they are also undertaking a massive project to underground utility lines in fire-prone areas.
The backstory here is that PG&E underfunded maintenance for decades while paying out substantial dividends to shareholders, and now that fires are killing lots of people, they have to go back and properly maintain their network.
Now, you can make the case that CA as a whole might not be better off if cities leave PG&E and the state has to subsidize rural power delivery even further, but I think the article is correct on the question that it tackles.
This is why Santa Clara, Palo Alto and Alameda's power companies can deliver power for half of what PG&E can. You can just copy their cost structure.
Boulder CO tried municipalization with Xcel and the gap between the city offer and Xcel position was very large. How do your figures look if you double the price and/or add in a decade tail of having to pay 25% of billing to PG&E?
The small munis you mention are in the same position as PG&E with respect to owning decades old poles and conductors with decades of life remaining. The incumbent has all the cards in this negotiation. An existing muni can do it cheaper for the obvious reasons you stated - legacy network, all the customers are close together. Buying the most profitable bits of the PG&E network at a price they would agree to would not be profitable.
Optimizing for factors other than universal service is completely valid, but I’m guessing each of those municipal power systems pre-dated rural electrification and thereby get to somewhat free ride on the system more than anyone would reasonably allow Walnut Creek to do in the year 2025.
It's a very problem to the healthcare market. Health insurance also has fixed profit, therefore there is a huge incentive to drive up costs. Better to make 15% on a $10,000 drug then 15% on a $10 one.
The power company wants to cut corners. The government wants to prevent that. So there is constant lawfare between governments and highly regulated companies, with neither really caring if it leaves the customer out of pocket (since regulators can blame the bills on the company).
The company outsmarts the regulators so the regulators carpet bomb them with so much regulation that they hope it will plug all the loopholes. The incentives between them are simply too far apart. And with inbuilt market failures (due to it being a monoppoly) you don't have effective market mechanisms that allow the government to just set basic safety standards and get out of the way.
It's closer to the USSR than social democracy. http://highered.blogspot.com/2009/01/well-intentioned-commis...
See also, healthcare.
https://www.alamedamp.com/DocumentCenter/View/1268/FY25-Rate...
Edit: Oh, this utility runs at a profit and has for decades. The profits have been going into undergrounding transmission lines
The payout ratio is the percentage of net income actually paid out to equity investors.
For utilities it's around 50% of net income, though it obviously depends
And yet somehow Americans will never see this and think "If only it were government-owned so the profit could be returned to the people"
About half the price of PG&E. This is in an otherwise PG&E area. People should be demanding their city handle power. It leads to half the price.
My power is significantly cheaper than yours but it comes from a private company.
Picking random cities doesn’t tell us anything at all about costs or efficiency. Different areas have different costs and expenses.
You have to compare apples to apples.
PG&E customers are paying very large amounts for the consequences of bad infrastructure causing wildfires and other legal costs which are being paid for with higher rates.
Example:
https://www.ewg.org/news-insights/news-release/2022/12/pge-a...
They just get blended into the tax bill.
Their costs get shouldered by their customers and their stock price. (they really should issue shares to pay their bills to dilute their stock price and cause their existing investors to lose money). In any case it's not going to get very willingly picked up by the government.
PG&E's liabilities aren't going to be put into taxes.
It's not the state government taking over PG&E, it's individual municipalities leaving the PG&E network and forming their own utility to buy wholesale electricity (or make some of their own) and distribute it to their citizens... resulting in a large reduction in cost in no small part because they no longer have to pay for PG&E's liabilities.
PG&E's current rate structure has urban rate payers subsidize rural rate payers and people who live in wildfire zones in e.g. the Orinda Hills, who need substantial investment in order to receive power without sparking wildfires. This is bad policy - instead of subsidizing fire zones, it should be cheap to live in safe places and more expensive to live in dangerous places. Lower cost of electricity would reverse these trends.They’re saying that the cost of providing electricity to the cities, where everything is densely located and there are fewer trees and fewer overhead lines needing under grounding is lower so they should charge less to city consumers.
They imply that the bulk of the cost is delivering power to the richer consumers further out because there’s a lot of line miles that need under grounding. That’s probably accurate.
But utilities are restricted from pricing like that because you don’t want utilities triaging customers that are less profitable. The article here makes the argument that the far away and expensive customers are rich, therefore fuck ‘em. I’m not familiar with California but I doubt this is true across the board. There are surely notably rich communities far from the city but surely there are also poorer areas further from the city that are relatively cheaper because the commute is worse.
Utilities should be legally required to serve everyone in their area, but they should also be allowed to charge the real costs for the service. If the government thinks that's unfair to people living in rural areas, it's free to use tax money for explicit subsidies. But the subsidies should only be 70% or 80% of the excess costs, to give the people in expensive areas some incentives to find more efficient solutions.
It's even worse in housing, where developers are often required to build below market rate units at their own expense. It makes new housing less profitable, and less housing gets built.
“The people” in expensive areas have literally no agency in finding an efficient solution. They don’t have any say about the utilities grid investments. In most parts of the country “these people” are also poorer.
The Rural Electrification Act not only brought power to rural areas, but also jobs to Americans when they were most needed, and countless follow-on benefits: increased farm productivity, longer lifespans and higher quality of life, etc.
It’s also not that subsidized compared to many other industries; the entire point of co-ops is purchasing something in bulk, with no one taking the profits. They get loans, yes, but the default rate on them is absurdly low.
And on that point, electric co-ops consistently produce reliable power at a lower cost than privately-owned utilities. I’ve experienced both, in multiple areas of the country, and by far co-ops beat everyone else.
This doesn’t even touch on the fact that the infrastructure enabled by the REA is also the only reason high speed internet ever made it to rural areas. Fiber everywhere should absolutely be a goal.
Because of this clustering - I live in a pretty rural area - but have natural gas and cable internet (only one option, so not that awesome).
But, I also have a well and a septic system. And I'm very thankful. As I was moving back to the US after 2 decades in a city, I did a winter with no high speed internet (used a mofi router with a SIM card as Starlink was overprescribed in the area) and propane for heat. It was a small house but heating with propane is crazy expensive.
Sacramento with SMUD is another success story. But there are some differences with economies of scale
That's possibly because of a strong underestimation of the actual indirect inefficiencies that come with shareholder profit-oriented companies. Every investment is seen not as a way to maximise profit in the long run, but as a direct decrease in shareholder profit, and should therefore be avoided at all cost (ha!) or postponed for as long as possible.
Strong counterexamples, admittedly not from energy companies, can be found in the remunicipalisation of the water supplies in Berlin and in some districts of Paris. Both came with drastic decrease of user costs, better water quality and a decrease of outages.
As well as Palo Alto's utility financial statement which is linked in the post.
Exactly. The cherry picked example in the article was chosen to ignore areas with higher expenses.
> For another, corporations are often okay overspending on executive compensation
PG&E had $25 billion revenue last year. How much do you think they spent on lavish executive compensation? Even if you could eliminate $100 million in compensation (doubtful) that’s still less than 0.1% of revenues. People overestimate the impact of executive compensation in large companies by orders of magnitude.
> and other lavish business expenses for tax purposes.
Again, you’re not going to find dramatic savings anywhere in the budget by cutting lavish business expenses at this scale. It’s noise. There’s also a persistent myth that companies can spend their way into saving money via tax write-offs, but for some reason my accountant tells me that’s not how taxes work.
Or in other words, companies aren't overspending on exec compensation for tax purposes. They're doing so because the board is not exercising proper financial control over the company.
One detail is that PG&E is a heavily and (IMO) incompetently regulated utility, and their profit margins are more or less set by regulation. So they inflate costs to drive up profits, and one should not assume that the only room for savings is removing their profit margin.
I do agree with your sentiment that city bureaucrats may be tempted to raid the energy business to pay for pet projects and other things. This can be protected against by segmenting the energy business into its own protected organization.
Administrative and legal costs don’t disappear when the city runs it, so why does it matter? When the city runs a utility, nearly all of the costs associated with running a utility still exist.
If your mental model of a city-owned utility is that they’re going to generate power and sell it at cost with no administrative overhead, you’re really just assuming that administrative overhead will be covered by taxpayers.
Electricity rates down, tax rates up.
> How is other states like Texas or Colorado are delivering at 10-12c/kwh ?
Texas produces the most crude oil, natural gas, and also wind generated electricity. A quarter of the entire country’s wind energy generation happens in Texas.
Comparing electricity prices across regions is meaningless. Everything is too different.
It is stereotyping, but it sounds like the sort of state that has a strong regulatory regime that would be quite controlling about what people can actually do. I note the irony that when Texas had a power outage everyone wanted much more regulation to force changes to grid maintenance, but when California spends 4x as much and PG&E skips on grid maintenance everyone throws their hands up because they can't call for more regulation and are out of ideas. The regulation doesn't seem to have dodged the maintenance problems but I'd bet it drives the cost up.
https://www.siliconvalleypower.com/residents/rates-and-fees
PG&E has an 11% margin on those rates because they keep burning the state down and having to pay for it. Municipal utilities don't have to worry about that.
The only thing that could be seriously considered a downside is that Santa Clara, CA is now absolutely jam-packed with data centers that have low employment per sqft.
The number of people that pay for-profit companies for natural gas (heat), electricity, and water in North America is absolutely bonkers. There is a specific concern about foreign corporations purchasing water rights in the American west.
I’m lucky enough to be in such an area. Note the city takes a bit of the above as profit too. Not that that’s a bad thing but it just goes to show how beneficial it is and how much more you’re paying by not doing it. Every city should do it asap.
Of course, none of this is exclusive to one or the other.
And private utility companies are?
What isn't effective is electrification and maintenance of low density regions although power monopolies like PG&E are required to provide service. The urban and suburban customers are effectively subsidizing the cost of transmission and maintenance for rural customers.
PG&E doesn't want their most profitable customer base[cities] to have public utilities because if enough do, their company becomes unprofitable and implodes.
This is exactly the reason we should do it.
Urban development subsidizes everything.
Go watch some Strong Towns.
Fuck suburbs, unless they were built around a streetcar.
> PG&E doesn't want their most profitable customer base[cities] to have public utilities because if enough do, their company becomes unprofitable and implodes.
If the state forces PG&E to electrify expensive areas at the expense of higher costs in cities, their objections are reasonable.
If California forced a private company to electrify rural areas as part of the deal and then tried to change the rules to have the government take over the cheap areas, there would be easy lawsuits on the table.
I left California last century but seem to recall the PUC(?) has a pretty tight reign on what PG&E does and doesn't do.
Hopefully no one manages them and that forces residents to move out and stop being a drain on society.
To put numbers on it: for a 12 kW system in Chico, CA (a location at ~40 degrees N I chose arbitrarily) the NREL calculator at https://pvwatts.nrel.gov/pvwatts.php gives annual generation of 18500 kWh (40 degree inclination). For a lifespan of 20 years at $0.34/kWh this is $125800 worth of electricity. A 12 kW + 16 kWh LFP battery system costs something like $36K (+ installation and financing).
> PG&E continues to demand huge payments on routine power grid connections. For example, the cost to comply with PG&E’s latest requirements for the City to use public power to connect streetlights, traffic signals and other small loads would exceed $1 billion.
https://www.publicpowersf.org/en/faq
I think either we need the political will to use eminent domain to take the grid back (i.e. set the price through a legal proceeding), or we'd need to build a duplicate distribution grid and then abandon PG&E.
I don't think the CPUC will let them get away with "we won't sell at any price" - I think the regulators would force them to sell at some price.
Has the CPUC forced such a sale before? Functionally, if PG&E can just safely gauge what's likely to be out of reach for each city, they can name a price detached from reality and be confident of maintaining their stranglehold.
Instead, slowly build out, in parallel, the upgraded – which is to say, underground – infrastructure that PG&E refuses to build.
A community could do this opportunistically on a schedule that tracks the normal repaving of roads.
[1] https://www.a2gov.org/sustainability-innovations-home/sustai...
https://www.cpr.org/2020/11/20/boulder-ends-decade-long-purs...
It's similar to public transportation. Most cities don't design a system, they order it from a catalog - and they pay private consultants (similar to Oracle consultants) to tell them what to do. There is so much corruption and privatization there, but unlike power there is no business case that would make it attractive outside of public funding.
"PacifiCorp Was Grossly Negligent in Oregon’s 2020 Wildfires. Now It’s Asking Lawmakers for Protection."
https://news.ycombinator.com/item?id=42971311
Because of regulation, they can gouge consumers who are captive to the damage, literally and financially.
Are there any germane examples of your “These formerly ‘public utilities’ are now often owned by PE or Berkshire Hathaway” claim or is it just a complete non-sequitur?
And, I did put public in quotes because these utilities, while privately owned, do benefit from regulatory capture that seems out of place with a privately held company. And they often operate on or over public lands.
And, having lived through the fires in Oregon and seeing the trauma first hand, I'm still angry.
That's my takeaway from the article but I'm willing to listen and learn. Your points are valid and show how mistaken some (or all) of my conclusions are based on false connections.
Seems like they're actively trying to fix it.
Rochelle's municipal utility system also provides water and sewer, and fiber-optic internet. https://www.rmu.net/
Austin Energy earns no profits and pays no federal income taxes. All revenues benefit the customers of Austin Energy and the residents of the City of Austin. The primary financial benefit to the City of Austin is Austin Energy’s transfer to the General Fund, which is set by policy and allocated by elected City Council members to municipal purposes such as fire and parks.
Inexpensive, reliable, and heavily litigated (just how I like my local utility).
People hate it and there has been a big effort from activists to turn it over to public hands. The local politicians are on board for the most part, but the company is of course fighting tooth and nail.
Utilities (generally) have a universal service obligation.
If someone can cherry-pick just the denser areas with lower distribution costs, of course they could "undercut" the utility with the requirement to serve everyone.
(I'm not saying that PG&E couldn't be better managed. I'm saying that there's a much, much deeper policy issue at stake here.)
I grew up in the Bay Area, lived in 'rural' Humboldt and Placer counties, and can say I would never move back to the bay no matter how much the technocrats would desire it.
Pretty happy with my ~30k town nowhere near California TBH...
Smud was very helpful and had a simple process while PGE wanted proof of business usage amongst other stuff (heard this all second hand though)
It's perverse that people who live in safe, urban areas are subsidizing people who live in wildfire zones. The savings come largely from not doing that anymore.
- Urban customers should have an incentive to use electricity over gas, which they would if rates were reasonable.
- Urban customers should not pay per kWh even if one thinks they should subsidize rural customers. It should be some kind of tax with reasonable allocation.
- Undercharging rural customers for provision of service and overcharging per kWh messes up incentives, too. If suburban or rural communities faced the actual cost of transmission to their area and distribution within it, they could make real decisions, for example:
# Technologies exist to reduce the risk that a power line fault starts a fire. Search for “ground fault neutralizer” or “REFCL.” Similarly common reclosers take a very YOLO approach to deal with a faulted line, and other approaches exist. PG&E, of course, doesn’t want to use these because the ridiculous CPUC rules let them make more profit by spending more money trimming trees.
# Communities could maintain their own lines and have actual locally enforced codes about vegetation.
# Communities could install batteries at their end of transmission lines to help ride through public safety power shutdowns and to level out their own loads. And they could even build small wind turbines optimized for operation in high winds (which are rather strongly correlated with those shutdowns) to generate a few MW and keep those batteries charged. Heck, this could be automated: de-energize the line when the wind is high automatically, and there won’t even be a substantial inrush when re-energizing when the wind stops because the batteries can reduce load to zero.
# A community could decide the cost isn’t worth it and build its own mini grid. This might spur interesting investment into things like small modular reactors :)
- The ownership and regulatory structure right now sucks, amplifying all the problems above and the lack of real solutions.
If we stop subsidizing the foothills by creating urban utility districts it would solve the PG&E problem.
We would have a new problem of causing a ton of people to be unable to continue living in those areas without some kind of off-grid program.
Long term I think this is the only sane way forward though.
But people in those areas are likely to be able to benefit from solar, so maybe being "off the grid" in the sense of not having long runs of power lines surrounded by trees to your house in the country is reasonable, and perhaps also cheaper for those rural residents anyway?
That sounds like more of a solution than a problem: those places are going to burn, so it's better that people stop living there.
It's not exactly fair to treat those rural residents as burdens to the urban areas when they provide the means for the urban areas to exist.
There's a difference between people that are in farming/ranching and industry vs. people that are rural to afford a more lavish home in the woods or on the hills.
Even still, a system that doesn't appropriately price and apportion risk will always be under pressure.
Unless you’re referring to farmers I don’t understand this point. As of right now it is the other way around.
- we get rid of nimby enabling laws
- don’t subsidize rural customers
- automate farming
But what people forget is that the CA state doesn't want PG&E.
The state already exerts significant control over PG&E operations through the CPUC (members nominated by Gavin Newsom). CPUC approves/rejects all capital spending down to new fences for electrical substations. You can read about all the decisions in the 931 page rate decision, which is public.
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M520/K...
But what about executive compensation? Well, a separate CA state agency approves that as well.
https://energysafety.ca.gov/what-we-do/electrical-infrastruc...
So at this point the CA state government basically runs PG&E. But if they purchased it, they'd be exposing themselves to all the political risk when things go bad.
But right now, they get political air cover. Despite the tight level of control over how PG&E is run, the CA state government gets none of the blowback.
It's the optimal setup from a political perspective.
I don't think so. Not currently.
"nor shall private property be taken for public use, without just compensation"
That's federal law. Supposedly, that applies to the states through the Fourteenth Amendment. All of the sudden, once the Fourteenth Amendment is passed, the Constitution applies to state governments, not just the federal government.
So if that's the case, no. You can't just "scoop up the assets for free" because you can't take private property for public use without compensation. I'm kinda a little bit suspicious that it makes sense to interpret the Fourteenth Amendment that way. Sounds like a power grab. If you want to try and turn that around, I know just the guys to do it.
That's not the question under consideration.
The question under consideration is if it constitutional for the government to "impose prohibitive fire prevention liabilities on utility companies, bankrupt them, and scoop up the assets for free".
Under my understanding of the law, no you can't do that, due to the takings clause and it's incorporation under the 14th amendment.
I think the law should be different, I don't agree with incorporation doctrine. But I still don't think the government should impose prohibitive fire prevention liabilities on utility companies, bankrupt them, and scoop up the assets for free.
Hopefully that clears everything up for you.
This is how public transit companies were generally acquired, but on the way to bankruptcy firms would defer maintenance to stave it off, which led to the sorry state of most mass transit systems today.
We should be doing more really in our current world. I confess I too spend too much time trying to build little apps just for money.
This just for money thing has got me reflecting a lot lately.
Everytime there is a natural disaster in the US the press report xxxx houses without power. US leccy firms pride the bear minimum service, always. Profit comes first. Delivery second priority at best.
This doesn't ofter happen in Europe because they dont profit cream and builds reliable redundant grid for almost everone. The grid even extends beyond countries boundaries, with neighbouring countries supporting each other.
Some folk out in the sticks, who you might think don't matter, provide useful services to the city folk. Eg farmers.
I.e. Cost the grid not the city.
You probably are being ripped off in the US, but that's a different story to the one being told imho.
Careful what you wish for.
I agree residential electric infrastructure in the US is not nearly as good as it could be. Buried power lines in suburban environments alone could probably cut outage numbers at least by half; but as one of the first countries in the world to electrify, doing that is a lot more expensive than in developing countries. Sometimes there is such a thing as a first-mover disadvantage!
If you see something you disagree with here please treat it as "I implemented notepad.exe in elisp" level of not even wrong.
Yes you can start it, but should we bow to political pressure to put off maintaining infrastructure? No. There's a real cost to maintain this stuff. But a political force doesn't want to raise prices so it gets depayed.
Sounds like an argument for ABAG to expand its energy related services into a full utility (at least on the electricity side): https://abag.ca.gov/our-work/energy-infrastructure
I think that reflects the broader public. If you can get people in one or the other mode, they will forget what they knew 24 hours ago.
Personally, I think private ownership and public ownership are two tools in the toolchest, good for different tasks. In many cases, privatization is a capitalist who notices a large, reliable cash flow, such as public utility revenue, and wants a cut of it. Public ownership can suffer from a lack of innovation - perhaps that matters less for mature technologies.
In our area, they handed over all school bus services to a private firm. The number of drivers, buses, and routes do not change. How was it supposed to save costs without degrading the service? The answer is, it did not. But administrations were diluted that they could take it off their liabilities.
Our governments should provide these services to Citizens at no cost to them.
We already pay for the maintenance costs and infrastructure is already built out.
Charge the companies for the services, and give them to the populace.
But, but, but, that's socialism! Taxes are socialism. Take from the many, use that spending power to benefit the people.
An enterprise, like providing a utility, has revenues and it has costs. The difference between the two can be called the "surplus labor value". What happens to that depends on the economic system.
In capitalism, capital owners own that enterprise (utility) and they siphon off profits raising the costs. Put another way, capital owners own the means of production, not the residents of the city or the city itself. This is rent-seeking behavior.
In a socialist organization of the economy, the residents either directly or through the city itself, would own the utility. Any profits would go back into the utility or be extra revenue for the city but there's really no incentive to increase prices on the citizens who own the utility (unlike the unquenchable thirst for increasing profits for capital owners).
I have to constantly point out that capitalism isn't markets (market existed thousands of years before it and exist in every economic system). Capitalism simply supplanted feudalism by replacing kings with billionaires. That's it.
We have abundant examples of how the latter is a substantially better system. Just compare EPB Internet (Chattanooga, TN and surrounds) vs Verizon, AT&T, Comcast or Spectrum. Municipal broadband, without exception, is substantially better than any national ISP. The only thing that keeps national ISPs in business is more rent-seeking behavior such as lobbying for legislation to ban municipal broadband.
Given this is the Superbowl weekend, it's worth adding that the Packers are owned by Green Bay (an arrangement the NFL now bans for any other franchise). What do we see in other cities? Teams extorating massive tax breaks from cities, counties and states to build massive stadiums at taxpayer expense without the team having to give up anything. The KC Chiefs are rumbling about leaving because the city didn't pass a sales tax increase to pay for upgrades to Arrowhead Stadium.
I don't know why anyone is surprised by any of this anymore.
> Usenet
That is FOSS and P2P collaberative (at least on the server level). Is that somehow connected with government?
Overall it reads like any other socialist argument for nationalizing (in this case "municipalizing") companies, which does not work both on theoretical grounds and based on historical experience. The claim "Walnut Creek could borrow from its utility in recessions, and loan money during booms" is laughable. We know how that ends: the city would finance its deficits with utility money until the company is bankrupt.
You could literally have half the power bill tomorrow if CA would stop taxing it.
With usage based bills, people with solar pay less than their fair share for the maintenance component of a utility's cost, which means that this cost is larger for the other rate payers. On top of this California has huge subsidies to early rooftop solar adopters. This structure hurts lower income people more since lower income people are more likely to rent and apartments don't have as much space for / not as interested in rooftop solar.
So the CPUC started exploring different models for adding a bigger fixed charge to the bill and lowering the per-kwh cost. Of course the rooftop solar installers hated this as did the different "equity groups." Which is where you got the idea to adjust the fixed charge based on income.
I don't think it's a great idea but I at least understand where the CPUC is coming from. We probably need more innovation in utility pricing models.
It is best as it is today: a consumption tax, like the gasoline tax. What justification is there for charging a higher income bracket more for electricity? You could make the "infrastructure maintenance burden" argument about anything: food, movie tickets, etc.
https://www.sfchronicle.com/california/article/pge-electrici...
Half of 50c even if I believe you is 25c still higher than 17c.
My heat (for both air and water) is provided by the building's boiler and is included in the rent, rather than the utility bill. My stove and oven burn natural gas. My air conditioning is "open the windows and hope it's not 95F outside".
I could totally see someone who had to do electric heating and cooling having a far larger bill than I do (especially if they're living in a place that's large than a shoebox).
Even yours is weird. I don't have a desktop computer running but we cook or bake with electricity every other day. I do realize we spend a lot less than other people, every time I check the prices and estimates if I want to switch the companies estimate 2500kwh for two people. So there's that.
Or some kind of production / workshop / datacentre / business usage.
https://www.washingtonpost.com/business/2019/11/11/pge-helpe...
https://www.sacbee.com/article251851903.html
Why would any of California's uniparty establishment want to refund all that money to random utility customers – who might not even be reliable party footsoldiers?
PG&E's lowest overnight rates are 30¢/kwh, surging during peak hours to rates ranging from 39¢/kwh to 72¢/kwh.
In neighboring Nevada, the utility serving its major metros NV Energy has rates of 11¢/kwh for residential users & 7-9¢/kwh for small businesses.
$700,000 over 20 years is $35,000 per year (not to mention Newsom wasn’t governor for most of that time)
PG&E revenues are $25,000,000,000 per year.
Regardless of what you think about the arrangement, it’s not why rates are high.
> In neighboring Nevada, the utility serving its major metros NV Energy has rates of 11¢/kwh for residential users & 7-9¢/kwh for small businesses
Comparing electricity costs across difference states rarely indicates much. Geographies, energy sources, and regulations are very different from state to state.
It's the tens of millions in political contributions to not just Newsom at every stage if his career but also his allies & ilk.
Plus tens of millions more in donations to favored "charitable" projects of family & cronies of politicians like Newsom & his allies.
Plus harder-to-tally overpriced jobs & contracts steered to the "right" (regime-aligned) consultants, firms, & unions. (Did you notice how the glowing character reference in the Wapo article, about how immune to influence Newsom is, comes from a former Newsom advisor – & member of his wife's nonprofit board – who currently has PG&E as a paying client of his PR firm?)
All the cash & favors are then topped off with a showy cheerfulness to "accept the responsibility" of extra costs from those state-idiosyncratic "regulations" you mention.
But of course that's the quid pro quo of their monopoly remaining unchallenged, & all costs more-than-passed-on to ratepayers – so the ruling machine including Newsom can keep getting their beaks wet in all PG&E's spending & donation fountains.
To look at only the formal campaign contributions against revenues, & accept as excuse a cover-story for extra corrupt expenditures ("regulations are very different"), & then conclude "no problem" is exactly why milking ratepayers this way, spreading the loot widely, is such a enduringly great racket.