A friend of mine is building a fiber optic design/ install outfit to service smaller markets, like 150k, or less communities. Why couldn't they bury electric at the same time and also rent that out to the providers?
Interesting idea, but I see a few practical problems: (1) A small disconnected private grid would likely be much more expensive than purchasing from existing suppliers. One of the major benefits of RTOs and larger utilities is the ability to pool resources to provide more efficient service. A private disconnected grid almost certainly would have to rely on inefficiently-sized generators, wires, and operating systems not operating at their optimal utilization; (2) a small grid likely would be less reliable unless it expends a large sum on duplicative facilities, making it even more expensive; and (3) a private disconnected grid might be able to avoid utility regulation, but would remain subject to other kinds of regulation, including environmental regulations.
I believe the largest barrier to true competition for electricity service is reliance on shared transmission and distribution wires. Paying a generation entity for pushing electrons onto the grid in one location proportional to one’s consumption somewhere else is not trade. And today’s regulatory/deregulated/physical grid system there’s no accountability for time of use/supply matching nor for actual performance and discrete load following. How can consumers drive the best suppliers to prosperity and growth and the worst suppliers out of business when all suppliers rely on each other for load following in grid stability?
For a little history on how monopolies formed and why, read P.G. and E. of California: The Centennial Story of Pacific Gas and Electric Company, 1852-1952 https://a.co/d/gzdl7U0
Before monopolies each company built its own distribution lines resulting in sometimes three or for sets of poles lines on the same street. Of course there was some competitive vandalism in the day. Interesting time in the development of utilities.
Could you boil down your view of "how monopolies formed and why" for me? It looks like I'd have to devote a lot of time and at least $64 to see what's in the book you recommended. Avoiding duplicative infrastructure is not an argument that I find very compelling, especially when the alternative is a monopoly operating with complete legal protection
Sure, it's no small secret that old city streets were narrow to begin with. Then you add several sets of pole lines with a spider web of service drops as different customers connected to the various utilities. It quickly became a public nuisance. Also splitting that much capital over fewer customers drove up costs. The big dogs started eating the little dogs and controlling the price. The government stepped in and created regulated monopolies that controlled prices at a small profit. It worked pretty well until someone dreamed up deregulation.
Do you have a citation where I can find evidence that the larger utility companies were charging monopoly prices? It's very common to see the economic theory of monopoly pricing in the electricity policy literature, but the track record of actual pricing by alleged real-world monopolists is not as clear cut
Bug off Travis, I quoted you something out of #@^$@$% history and gave you the @$$&^%# book to look it up in, now your being a @$$%&^%# asshole. I am not doing your @$&^$#& research for you.
Could you flesh out your vision of how this might work? Seems like the only natural monopoly of electrical power is just the delivery system, i.e. transmission lines. I wonder what would happen if transmission lines were declared to be lightly regulated, common carriers with perhaps just one rule: all customers pay the same for kW-hours per mile.
REU tried to go flat rate on delivery, or connection, and charge much less for energy. The solar companies launched a smear campaign and got it stopped.
That is precisely how Texas looked at deregulation. The "wires" company is difficult if not impossible to conceive as a multi-company system (think Company A poles, Company B poles, etc.). The "sparks" business is clearly feasible with many suppliers, many of them longtime existing in the chemical industry. And of course the nuclear plants are white elephants which don't clearly fit in anywhere... but I have been buying power from a variety of retail sources for 10-20 years. The results are okay, not spectacular.
The biggest barrier to implementation is keeping the lights on when the wind isn't blowing and the sun isn't shining. An interconnected system is the best way of solving this problem. The other big barrier is the scale of effect when large power stations are cheaper and more efficient than a collection of small ones.
But what we have is far from perfect and I have long advocated a "single buyer" which has competitive generation coordinated by a System Operator to make sure that, all the time, consumers get Power at the lowest possible cost. You can read all about it here: http://www.bryanleyland.co.nz/power-industry-stuff.html
It is also well worth reading "Shorting the Grid" by Meredith Angwin. Among other things she points out that most states with vertically integrated utilities have lower costs than those that adopted a so-called electricity market.
A friend of mine is building a fiber optic design/ install outfit to service smaller markets, like 150k, or less communities. Why couldn't they bury electric at the same time and also rent that out to the providers?
Interesting idea, but I see a few practical problems: (1) A small disconnected private grid would likely be much more expensive than purchasing from existing suppliers. One of the major benefits of RTOs and larger utilities is the ability to pool resources to provide more efficient service. A private disconnected grid almost certainly would have to rely on inefficiently-sized generators, wires, and operating systems not operating at their optimal utilization; (2) a small grid likely would be less reliable unless it expends a large sum on duplicative facilities, making it even more expensive; and (3) a private disconnected grid might be able to avoid utility regulation, but would remain subject to other kinds of regulation, including environmental regulations.
I believe the largest barrier to true competition for electricity service is reliance on shared transmission and distribution wires. Paying a generation entity for pushing electrons onto the grid in one location proportional to one’s consumption somewhere else is not trade. And today’s regulatory/deregulated/physical grid system there’s no accountability for time of use/supply matching nor for actual performance and discrete load following. How can consumers drive the best suppliers to prosperity and growth and the worst suppliers out of business when all suppliers rely on each other for load following in grid stability?
Tom, let’s talk. This concept is an alternative to the shared wires approach
For a little history on how monopolies formed and why, read P.G. and E. of California: The Centennial Story of Pacific Gas and Electric Company, 1852-1952 https://a.co/d/gzdl7U0
Before monopolies each company built its own distribution lines resulting in sometimes three or for sets of poles lines on the same street. Of course there was some competitive vandalism in the day. Interesting time in the development of utilities.
Could you boil down your view of "how monopolies formed and why" for me? It looks like I'd have to devote a lot of time and at least $64 to see what's in the book you recommended. Avoiding duplicative infrastructure is not an argument that I find very compelling, especially when the alternative is a monopoly operating with complete legal protection
Sure, it's no small secret that old city streets were narrow to begin with. Then you add several sets of pole lines with a spider web of service drops as different customers connected to the various utilities. It quickly became a public nuisance. Also splitting that much capital over fewer customers drove up costs. The big dogs started eating the little dogs and controlling the price. The government stepped in and created regulated monopolies that controlled prices at a small profit. It worked pretty well until someone dreamed up deregulation.
Do you have a citation where I can find evidence that the larger utility companies were charging monopoly prices? It's very common to see the economic theory of monopoly pricing in the electricity policy literature, but the track record of actual pricing by alleged real-world monopolists is not as clear cut
Typically a rate increase has to be approved by the State PUC, I suggest you start there.
You said: “The big dogs started eating the little dogs and controlling the price.” Do you have any evidence to support that statement?
Bug off Travis, I quoted you something out of #@^$@$% history and gave you the @$$&^%# book to look it up in, now your being a @$$%&^%# asshole. I am not doing your @$&^$#& research for you.
Could you flesh out your vision of how this might work? Seems like the only natural monopoly of electrical power is just the delivery system, i.e. transmission lines. I wonder what would happen if transmission lines were declared to be lightly regulated, common carriers with perhaps just one rule: all customers pay the same for kW-hours per mile.
REU tried to go flat rate on delivery, or connection, and charge much less for energy. The solar companies launched a smear campaign and got it stopped.
That is precisely how Texas looked at deregulation. The "wires" company is difficult if not impossible to conceive as a multi-company system (think Company A poles, Company B poles, etc.). The "sparks" business is clearly feasible with many suppliers, many of them longtime existing in the chemical industry. And of course the nuclear plants are white elephants which don't clearly fit in anywhere... but I have been buying power from a variety of retail sources for 10-20 years. The results are okay, not spectacular.
while I love this idea, it does seem hard to believe in the current environment, even at the state level, it would be enacted.
Thanks for reading. What do you see as the biggest barriers to implementation?
The biggest barrier to implementation is keeping the lights on when the wind isn't blowing and the sun isn't shining. An interconnected system is the best way of solving this problem. The other big barrier is the scale of effect when large power stations are cheaper and more efficient than a collection of small ones.
But what we have is far from perfect and I have long advocated a "single buyer" which has competitive generation coordinated by a System Operator to make sure that, all the time, consumers get Power at the lowest possible cost. You can read all about it here: http://www.bryanleyland.co.nz/power-industry-stuff.html
It is also well worth reading "Shorting the Grid" by Meredith Angwin. Among other things she points out that most states with vertically integrated utilities have lower costs than those that adopted a so-called electricity market.