Submitted 1 day ago by mesamunefire@lemmy.world to mildlyinfuriating@lemmy.world
https://lemmy.world/pictrs/image/5d82e8a2-478e-4f27-8a68-3f5f9a2bf317.jpeg
Seen on reddit and other sources:
old.reddit.com/…/the_more_i_try_to_save_energy_th…
Its already 50c or more per kilowatt hour… pge.com/…/residential-electric-rate-plan-pricing.…
We took profit for decades from letting our infrastructure decay. Now we still want that same amount of profit, so you have to pay more for us to fix all the problems that should have been fixed with that profit money in the past.
And then eventually we’ll stop fixing it for that amount of money, pocket the difference and go “tough, pay more” if you want it fixed again.
Electrical service should have a fixed connection fee.
The reason this happens is because electrical companies have two different kind of costs:
Those related to obtaining the electrical power from generation companies.
Those related to maintaining the grid and providing a connection.
In the past, normally what they did was to simply reduce this to a single price, and for that to be per unit of electricity used. That is, the consumer pays $N. That was at least not an entirely unreasonable approximation when people were pulling electricity off the grid.
The thing is, if a user mostly generates power locally, they still want to have that electrical connection and providing that connection still costs money. But now they’re also not paying for their share of the grid connectivity – it’s getting offloaded to the people who aren’t generating electricity locally.
Hence, the split that many utility companies are shifting to. There’s a fixed charge to have a connection to the grid, which covers the cost of grid maintenance. And there’s a separate cost per kWh of energy used.
If someone doesn’t care about the grid connection – like, they’re confident that they can handle their power needs locally, don’t care about having a grid connection, they do have the option to just drop service. But most people want to have the access to draw more power if they aren’t generating enough, so they want to retain their grid connection. With the grid connection fee being broken out, they cover their share of the costs.
Now, I’ve no disagreement that California electricity rates are pretty bonkers. They’re some of the highest in the US:
electricchoice.com/electricity-prices-by-state/
But the issue isn’t having a separate grid connection fee from an electricity used fee.
At least in Illinois, there is no option to go off grid. You’re legally required to maintain a grid connection even if you are generating all power locally.
This is roughly what we have in the UK.
For electricity, the standing charge is 61.6p/day, then 23.3p/kWh.
And gas is 29.6p/day, then 6.1p/kWh.
(The numbers vary, and you can choose to lock rates for the duration of a contract).
There has been some discussion of it in recent years (after it doubled, thanks Putin).
Whether it is fair for people using less energy…But in reality, everyone has similar 100 or 60A connections to the grid.
There are tarrifs for very low users, where the standing charge is combined with the first kWh.
Once I’m off the gas boiler, and on a heat pump, I may get my gas disconnected to save the standing charge.
On a tangent, as you may be interested, we now have the option of flexible electricity pricing that tracks the wholesale rates for the day. Usually, it’s cheaper, sometimes even negative. Link.
However, this week there has been a lot of expensive energy, so it’s been butting up against the £1/kWh limit!
70с/kWh is insane lolol
There’s certainly some reasonability to that. However, if the person decides to terminate service, maintaining the grid doesn’t become any cheaper for the power company. The lines are already installed, the connections made, and the company will continue to upkeep your connection all the way up to your home, even if it is terminated locally. They’ll do that just in case you or future homeowners wish to continue service, and your neighbors will likely still be using it anyway. So by that same reasoning, maintaining a just-in-case service connection that you don’t typically need because you generate your own power also doesn’t result in increased maintenance costs to the power company. So there is also an argument to be made that that cost shouldn’t be pushed to them, but to the power drawers that the power company actually wants to serve.
Well, I suppose they could just take out the stretch of power line between me and my neighbors who use their service and cut down those maintenance costs altogether!
This isn’t like a driveway, it’s more like a road. It’s used by more people than the people whose property it’s in front of. And where I live, the property owner is considered to be the owner of the lines that extend from the grid to the home, so guess who already pays the maintenance costs on that?
You do have to be careful here, because some localities actually require a grid connection to maintain a certificate of occupancy. Title 24 changed in recent years (here in CA), but you may still end up fighting your municipality and the POCO.
The way we do it in New York city is that the power bill has two columns. Delivery charges to pay for the lines and maintenance, and supply charges for the power generation. Both are per kW, like 3cents delivery plus 15cents supply. Plus a couple of fees and sales tax.
Are you saying that someone who uses 10kWh of grid power per month should pay the same “connection fee” as someone who uses 990kWh per month?
No, they’re arguing that the price of power should be split:
This makes sense, because regardless of you much power someone uses, the costs associated with maintaining the infrastructure that allows them to draw any power at all remain the same. This also happens to be the model used in Norway, so it’s not an untested concept.
Another option, relevant when the cost of building the power plant is large and the cost of energy production is negligible, is that everyone connected to the grid pays a near-flat fee in total, which is distributed among consumers depending on how much power they use. I’ve never heard of that option being used before.
Assuming both of those people use exactly the same infrastructure (which they do), yes.
The person with the higher usage will still pay more in total because the connection fee is just a base price, you’re still paying per kWh (which is forwarded to the companies running the power stations)
Generally you pay a grid connection based on the type of connection you have. A giant factory has a much beefier grid connection than single family residence, so the big factory has a higher connection charge.
Assuming they have the same type of connection, yeah, why wouldn’t they?
The way it works here (the Netherlands) the monthly cost for the connection to the grid depends on the maximum current and number of phases.
Some examples: a 1 phase 1A connection costs €11,12 per month, 3x 25A costs €168,99 , 3x 80A is €408,94 (there are other capacities available with different rates).
To me this seems like a fair way of doing it, someone who draws more power (or higher peak power) needs a beefier hookup and that requires beefier and more expensive equipment and cables.
Is the person’s connection to the grid using less energy a smaller connection, or is it the same? If they’re the same, why should someone using less be charges less of a connection fee? Why would usage impact a fixed on off fee?
In Norway we pay a different fixed fee based on the maximum hourly use (average of three highest hours) during a month, so that consumers that need a lot of effect from the grid pays the most.
“In order to continue to make the same profit (or more year over year) we charge more per unit when demand goes down… We also charge more when demand goes up… Suck it peasants”
It’s so absurd to me that the Energy Star stickers on appliances at the store say “Estimated based on $.13 per kW/h” and we have to pay around 5x that much.
Yep. And they are talking about more increases this year.
At what point is it cheaper to disconnect from the grid and just use solar with a back up generator? 50 cents+ per kWh is insane.
You cant legally disconnect a residential residence in CA from the grid unless you get some HEAVY permits. Thats one of the reasons PGE introduced the minimum fee. Some people were making a profit pushing electricity into the grid so they make it 0.03c per kwh credit instead of wholesale.
Interesting, that they’ll buy back energy at a fraction of the cost they’re charging for energy
My utility company spams me with warnings to reduce consumption to save them money in surge events while also shaming people for being in the top 40th percentile of consumption because they’ve got all these empty houses not using power to compare to.
I’m all for eating the rich, but I’m still going to point out why exactly this can make sense.
Let’s say you have an energy company that owns a solar farm, you’re not looking to turn a profit, just provide clean energy to the world: You produce electricity at effectively zero cost.
However, your solar farm needs to be paid down within its lifetime of ≈30 years, which is independent of energy consumption. So you decide to charge a rate that ensures 1/30th of your production costs are paid back each year, so that you can replace the solar farm after 30 years.
This effectively means you are charging a constant rate for access to energy supply, independent of consumption. This again means that the rate per kWh goes up if average consumption goes down.
Individual customers can still save money by reducing consumption relative to the other customers, but nobody saves money if everyone reduces consumption. This makes complete sense when your “marginal cost” (i.e. the cost of producing energy) is negligible compared to the initial investment of building the power plant, and also applies more or less to nuclear, hydropower, and wind power as well.
Given that this is not an ideal organisation though, I wouldn’t put it past them to increase the rate such that it more than offsets the decrease in consumption, thereby increasing their profit. In that case: Fuck them.
I just think we should be aware that our current understanding of energy prices as linked to day-to-day consumption (because the primary expense for a thermal power plant is the cost of fuel), will become outdated as we move to clean energy sources. At some point, we should be paying a near-flat rate for “access to power”, rather than a rate for each unit of power consumed.
That example breaks down with electricity sources with a fuel cost. But it makes more sense as the grid moves to more energy sources without fuel.
But also, if energy supply is higher than demand on a large grid, they can decrease investments into new solar plants so they fall below the replacement rate from facilities aging out. In your example there’s only one solar farm, but in reality there’s many being built on a grid at any time.
I’d say their example is just an oversimplification to keep it understandable. Ultimately fuel based energy has a lot of the same concerns. That natural gas facility costs money to keep viable even if, hypothetically, zero fuel were being burned in some given week. The power lines need repairs, maintenance, upgrades, and expansion over the potential capacity, not actual usage. You have fixed costs alongside the marginal costs. The marginal costs certainly make sense to map directly to usage based rate, but fixed costs are significantly covered by those usage rates as well rather than bumping up the “basic charge” sort of line item on a power bill.
Seems like in such a case, it should be a different mix of base fixed monthly bill versus usage based rates, to more accurately reflect the cost structure in play.
For example, in my area it’s about $15 a month even if you use absolutely no electricity, that’s just the base charge ostensibly for the infrastructure required to deliver power, should you want it. It might make sense for this number to be increased rather than raising $/kwh rates.
Suppose the counter would be that at least with the rate increase, folks in more dire circumstances can cut back to avoid the increasing costs (which might be a bit of a feedback loop…)
But the size of the array, and therefore the cost of the array, are intimately tied to the production of said array. So there can’t be flat rate unless consumption never surpasses production, which is of course will when you have zero marginal cost.
This is definitely a simplification, which is why I pointed out the possibility of distributing costs among the consumers based on how much of the total consumption each consumer is responsible for.
I think the major point still stands though: In order to take advantage of production at scale, you need to build some minimal size production facility. For stuff like hydropower, that minimum can be quite high, depending on available geography.
If marginal cost is zero, it makes most sense to charge some form of flat rate to have access to power, rather than a consumption-based price, because it’s not necessarily feasible to downscale the facility, even if there’s low demand (in that sense, hydro or nuclear would be better examples than solar).
The details of how this more or less flat rate should be distributed among consumers is a discussion in itself (should those living further away pay more since they require more power lines? etc.)
That’s not really what it’s saying.
It’s saying if they sell less power then the cost per unit of power goes up. This is how all businesses work due to economies of scale. If you sell a lot of stuff then you can sell the stuff for less money and still make more money.
If you personally use less power then that won’t increase your price per unit enough to offset the savings you made by using less power.
It’s not how all businesses work. Many businesses lower prices when there is a surplus. It’s ridiculous that energy prices would go up when they are spending less on natural gas, coal, or whatever they are using to create the power.
Honestly crap like this is just going to encourage those that can afford it to install solar panels and backup batteries to load up on cheap electricity. Then the power company is really going to throw a hissy.
The gas station example still has this issue. The gas station’s fixed overhead costs are passed on to the customer. Divide those overhead costs by the number of gallons sold. Reduce the number of gallons sold, and the “overhead fee” per gallon increases.
The power generation facility itself still has massive overhead costs regardless of how much fuel they are using at any given time.
i think the title has the “you” meant in the “you all” sense, if the customers as a whole save energy, the price per unit goes up.
And public utilities commissions just exist so people can think they have a voice while their meetings are just a big circlejerk.
Municipal power is so the way to go, much like everything else, especially because home town service will be run by home town people that care. You think PG&E or Verizon or Comcast cares about your town? Nope.
I thought energy in the U.S. was laughably cheap, but those prices are surprisingly expensive compared to my feel-good-all-hydro-and-wind plan at 0,35€/kWh
My UK rates are about £0.26/kWh for the day rate, £0.07/kWh for the night rate which is when things like car charging is done. Excess solar generation makes me £0.15/kWh I send back to the grid although not much of that going on in the winter ;-)
We also pay a daily standing charge for the grid connection.
That’s California though, where everything is expensive. In the east coast I paid around $0.20 this summer which includes peak hours. Although it has steadily gone up in the last few years. It used to be $0.12-$0.14.
They are outrageously expensive compared to my hydro Quebec rate of USD $0.05/kWh, or even my previous rate in Ontario of (varying by the the time of day) USD $0.06-0.12/kWh.
96% of Quebec electricity is generated by hydro power, which of course doesn’t require any fuel. The other thing, though, is that power generation and transmission is done through a public corporation, not a private one. The profits go into general government revenue.
California has historically high electricity rates.
Chiming in, Michigan has variables rates depending on time of day, and range from $0.12-$0.18 per kWh
Both California and Texas have struggles with energy costs. California with their constantly high rates, and Texas with their spot pricing occasionally royally screwing people.
Gee it seems like they could come up with a simple algorithm to protect low income people who are conserving.
Aaaand why aren’t costs going down as usage goes down?
Plenty of costs don’t depend on how much usage there is. If a tree falls and takes out a power line it cosrs the same whether that line was being used at 1% capacity or 100%
True, true. Other costs should track with usage though, like fuel. If they had said “when usage falls, costs don’t fall AS MUCH due to fixed costs” then I would totally get it. The way they phrased it makes it sound like costs going down just isn’t a thing that happens. Maybe that’s me.
oyo@lemm.ee 1 day ago
Privately owned publicly enforced monopolies are rife with conflicts of interest. PG&E should be taken over by the state yesterday.
skip0110@lemm.ee 1 day ago
There are public utilities in the US. And yes, they offer better service and lower costs than the competing private utilities.
I didn’t know about the benefits until I moved somewhere served by them. I think we would have more of them if people could see the benefits, but unfortunately the utilities you have access to are limited by where you live.
Gradually_Adjusting@lemmy.world 1 day ago
Very yesterday.
ayyy@sh.itjust.works 22 hours ago
It’s ridiculous that due to some old unique contract the city of San Mateo? Mountain View (I forget) which is right in the heart of PG$E turf gets to set their own rates and they are less than a quarter of the price, for the same electricity from the same generators and wires. PG$E is such a horrible scam.
AngryCommieKender@lemmy.world 1 day ago
Which is worse, PG&E or SDG&E? Thankfully my house is all electric and solar powered so I get a refund from SDG&E every quarter for the excess energy I’m producing, so I don’t have much experience with them.