PG&E SmartMeters likely to boost shut-offs

The advanced, digital meters allow San Francisco's PG&E to turn service off or on without sending a crew to a customer's home. As a result, PG&E expects to shut off 85 percent of the customers eligible for disconnection in 2011, according to the company. In 2008, just 37 percent of customers eligible for disconnection actually lost service.

The number of disconnections could approach 380,000 in 2011, according to a document PG&E filed last month with the California Public Utilities Commission as part of the company's latest rate-increase request. Last year, the commission reported that PG&E shut off service to 298,020 delinquent customers in the 12-month period that ended in August.

The prediction comes at a sensitive time.

The number of Californians losing electricity and gas service has jumped as the recession ravages household budgets. At the same time, PG&E's SmartMeters have come under fire from some customers who say their utility bills soared after the new meters were installed.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/01/25/BUUG1BNBVD.DTL

here in Maryland. BG&E will be taking a rate hike of 5% per year for the next 5 years and most lower to lower middle class folks can not afford to pay such high bills.

it has little or nothing to do with energy conservation and increasing the number of distributed energy systems.

It was PURE paranoia laid down over a heaping pile of ignorance.

:)

(paranoia) = (awareness x cynicism) - (financial interest)

:-)

The OP is about digital meters allowing PGE to remotely shut down those late on utility bills. The paranoid post read:
"This is, of course, the REAL reason for the so-called 'smart' grid it has little or nothing to do with energy conservation and increasing the number of distributed energy systems."

I'm not sure what the cost estimate is for build out of a smart grid, but it has to be in the vicinity of a trillion dollars. You don't think it is a bit paranoid to conclude that spending that kind of money just to shut off people's power?

Especially when a distributed grid will greatly reduce the dependence on central utilities and thus the control of utilities over the individual?

> The OP is about digital meters allowing PGE to remotely shut down
> those late on utility bills.

Thus providing a big carrot to buy into the plan.

> The paranoid post read:
> "This is, of course, the REAL reason for the so-called 'smart' grid
> it has little or nothing to do with energy conservation and increasing
> the number of distributed energy systems."

I admit, I read it as somewhat tongue in cheek rather than wide-eyed
so I don't agree that this was the "REAL" reason, merely that it is
now a "MAJOR" reason.

As far as I'm aware, the only bits of this "smart grid" being realised
by PGE at the moment are the meters that provide the ability to control
the end-user's supply (whether behind in payments or not). The aspects
that allow flexible feed-in and other eventual benefits are dragging
behind those aspects that allow control from said central utility.
(I'll readily admit that this might be a faulty impression drawn from the
potentially biased information available.)

> I'm not sure what the cost estimate is for build out of a smart grid,
> but it has to be in the vicinity of a trillion dollars.

How much comes from a single entity like PGE?
How much from the state/government?
How much was to be spent on maintenance/repair/expansion even without
any "smart" aspect?
I would be surprised if PGE's cost net of the above was anything like
a trillion dollars.

> You don't think it is a bit paranoid to conclude that spending that
> kind of money just to shut off people's power?

As mentioned above, I don't view the ability to "shut off people's power"
as the only reason but *control* is a major one (and yes, I do think it is
a bit paranoid but, as mentioned upthread, a little paranoia is not always
a bad thing).

> Especially when a distributed grid will greatly reduce the dependence on
> central utilities and thus the control of utilities over the individual?

Again, we have the theoretical "when fully implemented" versus the practical
"starting with this" effect. Ultimately, you are completely right in that,
if *everyone* plays by the rules (assuming that "the rules" are fairly
written in the first place) there is the potential for much greater freedom
for the individual. I am suggesting (and believe the earlier posters were too)
that in these early stages, there is much greater potential for *less* freedom
as the central utilities now have much *greater* control over the individual.

That situation is what justifies a certain amount of cynicism (or "paranoia"
if you prefer).

:shrug:

A very reasonable, realistic post.

The number of things I've discovered to be cynical about in the past decade have caused me to assume cynicism as my default position. That reaction can often look like paranoia to others.

Acute and chronic depression would be much more probable...

The big carrot is provided by eliminating the need for meter reading; which is a dramatic cost reduction that is passed on to ratepayers.

Your discussion on "control" and "theoretical ...versus ...practical" is odd. If what you mean by "control" is more effective management, then yes a smart grid does result in more control. However to characterize that more effective management as "greater control over the individual" is simply horseshit.

If people can't pay their utility bills for legitimate reasons the solution to addressing the issue doesn't lie in inefficient management of the power grid, it lies in social and economic policies that work for all of us. To claim that the preferred solution to economic distress is to force people to live in fear of whether the power company will get around to shutting their power off this month or next is as close to Republican style slumlord management as anything I can imagine.

That is the proper focus for the short term - policies that evaluate the *decision* to shut off someone's power in light of economic circumstances. In the long term the changeover to a grid linking distributed renewable energy sources is the way that the individual actually can be empowered. To object to moving towards that goal based on a disingenuous argument meant to capitalize on populist anger is nothing more than a dishonest ploy to derail the move away from the structure for supplying energy that actually DOES result in great control over individuals by large corporations.

If such individual empowerment were really your concern, the very LAST technology you'd support is nuclear power for it is the ultimate in centralized control of an energy resource.

In light of that do you, in fact, reject nuclear power?

Inefficiency here is clearly giving people breathing room, though. How many people before this meter change managed to pay their bill, albeit late? In 2011 how many people are going to have to sit in a house without electricity while they gather the funds to pay their bill? They are going from 37% to 85%, kristopher.

All we need now are "eligible for disconnect but paid their bill" statistics. I know I have been there, many times over my life. I always called in, asked for an extension. It appears now that the reason I got the extension was because the power company was inefficient.

A solution would be for the power companies to set fixed rates for low income customers since variable rates tend to follow difficult to "change" usage patterns. So people who use their air conditioners during summer days and can afford it will boost demand, but those who cannot afford it will not be able to run their air conditioners, because the variable rate triples their costs (in the low end scenario).

Fixed rate for low income is the only fair solution. Fat chance that will ever fucking happen.

You logic is kneejerk and reflects a lack of consideration of all variables. I'd suggest you regroup before you raise the issue in its own subthread.

PG&E only stands to profit from "SmartGrid" technology. The poorest of the poor see no marginal benefit unless new policies are enacted to make it beneficial. As it stands now those policies are non-existent.

The big carrot is provided by eliminating the need for meter reading; which is a dramatic cost reduction that is passed on to ratepayers.

Your discussion on "control" and "theoretical ...versus ...practical" is odd. If what you mean by "control" is more effective management, then yes a smart grid does result in more control. However to characterize that more effective management as "greater control over the individual" is simply horseshit.

If people can't pay their utility bills for legitimate reasons the solution to addressing the issue doesn't lie in inefficient management of the power grid, it lies in social and economic policies that work for all of us. To claim that the preferred solution to economic distress is to force people to live in fear of whether the power company will get around to shutting their power off this month or next is as close to Republican style slumlord management as anything I can imagine.

That is the proper focus for the short term - policies that evaluate the *decision* to shut off someone's power in light of economic circumstances. In the long term the changeover to a grid linking distributed renewable energy sources is the way that the individual actually can be empowered. To object to moving towards that goal based on a disingenuous argument meant to capitalize on populist anger is nothing more than a dishonest ploy to derail the move away from the structure for supplying energy that actually DOES result in great control over individuals by large corporations.

If such individual empowerment were really your concern, the very LAST technology you'd support is nuclear power for it is the ultimate in centralized control of an energy resource.

In light of that do you, in fact, reject nuclear power?

The big carrot is provided by eliminating the need for meter reading; which is a dramatic cost reduction that is passed on to ratepayers.

Your discussion on "control" and "theoretical ...versus ...practical" is odd. If what you mean by "control" is more effective management, then yes a smart grid does result in more control. However to characterize that more effective management as "greater control over the individual" is simply horseshit.

If people can't pay their utility bills for legitimate reasons the solution to addressing the issue doesn't lie in inefficient management of the power grid, it lies in social and economic policies that work for all of us. To claim that the preferred solution to economic distress is to force people to live in fear of whether the power company will get around to shutting their power off this month or next is as close to Republican style slumlord management as anything I can imagine.

That is the proper focus for the short term - policies that evaluate the *decision* to shut off someone's power in light of economic circumstances. In the long term the changeover to a grid linking distributed renewable energy sources is the way that the individual actually can be empowered. To object to moving towards that goal based on a disingenuous argument meant to capitalize on populist anger is nothing more than a dishonest ploy to derail the move away from the structure for supplying energy that actually DOES result in great control over individuals by large corporations.

If such individual empowerment were really your concern, the very LAST technology you'd support is nuclear power for it is the ultimate in centralized control of an energy resource.

In light of that do you, in fact, reject nuclear power?

The big carrot is provided by eliminating the need for meter reading; which is a dramatic cost reduction that is passed on to ratepayers.

Your discussion on "control" and "theoretical ...versus ...practical" is odd. If what you mean by "control" is more effective management, then yes a smart grid does result in more control. However to characterize that more effective management as "greater control over the individual" is simply horseshit.

If people can't pay their utility bills for legitimate reasons the solution to addressing the issue doesn't lie in inefficient management of the power grid, it lies in social and economic policies that work for all of us. To claim that the preferred solution to economic distress is to force people to live in fear of whether the power company will get around to shutting their power off this month or next is as close to Republican style slumlord management as anything I can imagine.

That is the proper focus for the short term - policies that evaluate the *decision* to shut off someone's power in light of economic circumstances. In the long term the changeover to a grid linking distributed renewable energy sources is the way that the individual actually can be empowered. To object to moving towards that goal based on a disingenuous argument meant to capitalize on populist anger is nothing more than a dishonest ploy to derail the move away from the structure for supplying energy that actually DOES result in great control over individuals by large corporations.

If such individual empowerment were really your concern, the very LAST technology you'd support is nuclear power for it is the ultimate in centralized control of an energy resource.

In light of that do you, in fact, reject nuclear power?

... considering how many times that response has bounced around on this thread.


> If people can't pay their utility bills for legitimate reasons the solution
> to addressing the issue doesn't lie in inefficient management of the power
> grid, it lies in social and economic policies that work for all of us.

Agreed.
Now let's see how many corporations adopt the altruistic approach of solving
(or even recognising) the underlying problems rather than simply preserving
their profit level by a quick, efficient, remote disconnection.

> That is the proper focus for the short term - policies that evaluate the
> *decision* to shut off someone's power in light of economic circumstances.

Agreed.
Now consider how the ability to easily disconnect a late payer affects
the decision process involving the low-paid target-driven employees of
a (naturally) profit-oriented company.

> In the long term the changeover to a grid linking distributed renewable
> energy sources is the way that the individual actually can be empowered.

Agreed (again).
In the long term, it will be a very good move for most people.
As I stated earlier, my concern is not with the long-term goals but with
the short-term potential for abuse.

> If such individual empowerment were really your concern, the very LAST
> technology you'd support is nuclear power for it is the ultimate in
> centralized control of an energy resource.

Oh look: a strawman combined with a topic diversion on a personal basis.
:eyes:

> In light of that do you, in fact, reject nuclear power?

Not that it has anything to do with this topic but if it makes you happier
I will respond.

I don't reject nuclear power per se but I will definitely agree that
Americans are not to be trusted with nuclear power. Furthermore, I think
that many Americans are not to be trusted with anything more complex than
a butter-knife and seeing "your" tendency to put said people in charge
of companies (not to mention the country as a whole), I am quite prepared
to drop my preference for nuclear power as far as it applies to the USA
for this reason alone.

Happy? Can we stick to the topic now please?

One of the big reasons utilities are so on board with it is because they will be allowed to charge a variable rate, boosting prices with demand.

Basically raising prices to try to get people to use less.

More money for them.

The more accurately any market can match demand to supply, the more efficiency it can operate. The more efficiently it can operate, the lower the total costs. Since virtually all utilities are regulated on a cost plus basis, savings of this nature go directly to the consumer.

Time of day pricing also encourages more efficient use of electricity and, as you say, conservation. Both work to lower the overall costs which are, as noted, passed on to the consumer.

Providing po' folks with heat in the winter is a Liberal and Democratic value!

The Smart Grid means that power will NEVER be "Too Cheap To Meter".

--d!

How you can characterize the truth as "shilling for utilities" or how you can relate it to "providing po' folks with heat in the winter" is something that only a teabagger or a nuclear diehard would understand.

Virtually all utilities are REGULATED on a COST PLUS basis. That means that savings realized by technologies like smart meters are passed on to consumers and are reflected in lower utility bills.

The only entity to EVER claim "power too cheap to meter" is the liars in the nuclear industry.

What distributed generation with renewables offers is independence from the grid and stability in an individual's power supply and the cost of that power.

That the power companies are going to set the base price lower than it is today, and not make the variable price higher?

The whole idea is to price electricity high enough to make people use less of it as the demand curve rises.

To think these corporations aren't going to get more money from this is ridiculous. The are after all profit based.

And the regulators are going to hold that increased profit out like a cheese to a rat to get them to invest in the smart grid technology.

Not that it's a bad thing in the long run, people do need to conserve more. And it does help to even out the demand curve, but you can't deny that variable pricing throughout the day isn't going to be taken advantage of by utilities.

Do you not know what it is or do you just not care?

"The whole idea is to price electricity high enough to make people use less of it as the demand curve rises."
Where do you find a basis to conclude that this fantasy is "the whole idea" behind this motivator?

The price of electricity at 2pm on a summer day IS 10X-20X-30X times the off peak price. Your statement implies that they are going to assign an artificial price in order to discourage use. That is false.

I see nothing wrong with a consumer being given the actual information about what their choice to consume will cost. When it is averaged into a monthly bill, it hides the TRUE COST of providing most expensive electricity. Hiding the cost of the most expensive product doesn't lower the ultimate amount paid for anyone.

So yes, I do deny that "variable pricing throughout the day (is) going to be taken advantage of by utilities." Again, they make money on a cost plus basis so the savings from decreased demand will be passed on to the consumer.

I don't see anything wrong with it. Smart meters are the future and hold good things for utilities and consumers alike.

So you can drop your usual irrational kneejerk.

Utilities are looking at this for profit.

Profit from firing all their meter readers

Profit from shutting off more customers more quickly, automated shut off by central computer.

Profit through variable rates.


Most utilities exist to make profit and seek profit in all they do.

To say they won't seek profit in these ways through smart meters is laughable.

Do you really think they want their income per customer to drop?

You need to understand that or you can't understand how a utility operates.

Google "electricity natural monopoly" and start from there.

When regulators are moving away from old cost plus schemes with smart meters?

You may want look up decoupling. As in "disassociation of a utility's profits from its sales of the energy commodity"

http://en.wikipedia.org/wiki/Decoupling#Utility_Regulation

As I said, if you think the utilities want to lose revenue by consumers using less power, your mistaken.

Decoupling is specifically to keep utility revenue up, while providing less electricity.

http://www.sightline.org/research/sust_toolkit/solutions/decoupling-utilities-seperating-profits-from-energy-use

And variable pricing is part of it.

And if you think centralized auto cut off of people's power isn't going to become the norm, you have another think coming there as well.

2) it doesn't support your assertion that the use of smart metering or the move to a smart grid is to pad the utilities profits.

The standard in the industry is still cost plus.

I didn't say that there isn't an ability to cut off people's power remotely so that is a strange thing for you to say. What I DID say was that the proposition I called paranoid (cutting off utilities for nonpayment remotely as the REAL reason for moving to a smart grid) is a sign of paranoia and lack of knowledge.

I will amend that and allow the possibility that it could also be another bullshit fabrication by the nukenuts that infect DU.

As an incentive to get utilities to get on the bandwagon for energy efficiency.

As energy efficiency under cost plus hurts their income.

And it will become the standard, as it has with the specific case we're talking about as PG&E is operating under California's decoupling laws.

As a PG&E spokesman Keely Wachs says...

"Decoupling breaks the link between the energy we sell and our revenues. So ultimately what it does is that it disincentives us to sell more energy. It's counter intuitive to anyone who has grown up in a capitalist society because if you sell more, you make more... that's not the case in California!", said Wachs."

Cost plus is dying out, and the utilities are on board because they get to keep revenues for selling less power. It's just how it is.

It doesn't remove a utility from oversight nor does it increase the profits of a utility - it encourages them to be socially responsible while allowing them to meet existing obligations.

Your argument was that this technology pads profits.
I explained that how the prevailing system of COST PLUS REGULATED operations means that isn't true.

You then tried to find some way around the facts by dredging up a policy tool that is good, but not widely used. Unfortunately you are more eager to win a point that to take the time and actually understand an issue before making more untrue assumptions.

The use of decoupling solves a knotty problem inherent in the current system - how to decrease consumption without bankrupting the businesses that own and operate the current system.

When people pay their utility bills they are not only paying approximately a 6% return on investment to the entities that funded the infrastructure but they are also paying operating costs, loans etc.

If a utility pursues aggressive conservation/efficiency measures without having a way to ensure the revenue stream that pays their bills they, and the people they serve, are fucked and without power.

That is the problem decoupling solves. It doesn't remove a utility from oversight nor does it increase the profits of a utility - it encourages them to be socially responsible while allowing them to meet existing obligations.

"If a utility pursues aggressive conservation/efficiency measures without having a way to ensure the revenue stream that pays their bills they, and the people they serve, are fucked and without power."

So you said it yourself.. Same revenue for selling less power. And that doesn't generate more profits? ROFL...

"The use of decoupling solves a knotty problem inherent in the current system - how to decrease consumption without bankrupting the businesses that own and operate the current system."

The use of decoupling solves a quite simple problem. That cost plus only provides incentives for a utility to sell more power, and the works against getting the utility to be efficient or participate in energy efficiency programs.



Variable pricing just adds to the ability to pad profits.


And PG&E, the utility in question here, as is every other utility in the state of Cali is decoupled by law.

As are many others in the country. Almost 40% of regulators nationally allow decoupling as of 2009. That's not widespread?

But wait there is more! The 2008 stimulus bill has the feds pushing decoupling as well...

"Turning decoupling into a federal matter is itself dubious, since it is part of "retail" ratemaking (i.e. for sales to final users) explicitly delegated to states under the Federal Power Act and subsequent legislation. The bill conditions a state’s eligibility for certain efficiency-related funds on its governor’s notifying the Secretary of Energy that it will seek to implement decoupling practices."

http://www.instituteforenergyresearch.org/2009/02/13/paradise-decoupled/


I'm just presenting a fact, utilities want profit from everywhere they can get it, from everything they do. They look to variable pricing as a means to do so, just as they look at firing meter readers as a means to do so, and automated shutoff of service as a means to do so.

Your the one standing on some idealistic vision of utilities to score some absurd point here.

To say a utility does anything, especially a large scale replacement of meters and capital investment for smart management systems isn't specifically designed to create and increase profits is simply laughable. The only exceptions might be coops or city owned utilities.

It maintains their revenue stream to meet their obligations. You can repeat the mischaracterization as often as you want but it doesn't "pad" their profits nor does it "increase" their profits. A good example of *how* you are mischaracterizing the issue has to do with labor savings from not using meter readers. Savings from a line item like that would be passed on to the consumer, not internalized as profit.

While 40% of regulators may allow it, it still isn't close to being the NORM. I hope it is adopted, but we are not there yet.It is similar to the problem of how we pay for roads if we move to EVs. Since most highway funds are collected as gas taxes, how do we pay for highways if people don't buy gasoline and use electricity instead?

Utilities have existing obligations that have to be paid for and they have a contractual right to the profits included in agreements made with the public. If WE want them to alter the way they do business it is ethical to ensure that our desire to alter the way the public uses energy is accomplished while honoring those obligations - that doesn't "generate more profits" and it is not a mark of greed on the part of the businesses involved.
When we want investors to take risk of that sort the interest rate is at least triple that being paid to the average regulated utility business.

You've said you are in business. I can just imagine what you'd do if the government signed a contract with you for delivery of 100 million units of a given product, and then - after you borrow the money and build the facilities to manufacture the product and after you contract with all the suppliers you need to build 100 million units - the government said to you "Sorry, we've decided that we are going to dramatically reduce the amount we agreed to pay you". They explain that your product isn't as environmentally friendly and ask you to absorb all the losses as they phase in the more environmentally friendly product. Since they are appealing to you to take the loss on the principal of concern over the broader public welfare, I'm sure you are going to be consistent with the values you are claiming and agree to invalidate the original contract, right?

Now that I think about it I think I understand the problem - the issue is ethics; and that appears to be a subject that you have little familiarity with.

The people that have no familiarity with ethics are the utility, especially PG&E. Just ask Erin Brockovitch..

I never said decoupling was the norm, though it may soon be and definately is in this case. Smart meters/grid aren't the norm yet either, and the old forms of regulation are dead wherever smart grid is installed and energy conservation is accomplished.

A new grid with new mandates for energy conservation requires different regulation schemes.





This is about PG&E, who are decoupled, have been for almost a decade now, who are installing smart meters and who do profit.

Of course utilities have existing obligations, their most important one is the obligation to provide shareholder returns.

Regulators have a mandate to alter forms of utility regulation and provide incentive to utilities to "buy into" energy conservation. That incentive is in the form of increased profits or at a minimum more consistent profits(less risk). Otherwise it simply is not an incentive for them at all. Utilities are playing this for all it is worth, they have leverage.





I have much familiarity with ethics, but I have rarely seen "ethical" used to describe PG&E or other large utilities. It seems to be only marginally more apt to be applied to utility commissions regulating them.

This is nothing like paying for public infrastructure through taxes like roads. We're talking a for profit utility corporation, and their role with regulators trying to give them profit incentives. The only incentive a large for profit corporation hears is profit incentive.

They are being given an economic incentive to make the huge investment in capital to remake their infrastructure, and it's not just ability to fire meter readers.

It's hilarious to watch you go so far to defend big utilities run by the right wing corporatist repubs you so despise.

All because you somehow think I am attacking smart grids when I'm not, your just too myopic to see it.

I'm clarifying the distinction you are trying to blur - the difference between a tightly regulated corporation and one that operates in a free market arena.


You can see that you are wrong just by closely looking at the discussion between Josh and I at the end of this thread. It is very clear that ability to pay and low/high usage are important considerations in pricing.

In the realm of tightly regulated corporations there is always a struggle.

Regulators representing consumers vs. corporation representing shareholders.

In this instance regulators are put at a disadvantage in the struggle, by a mandate to conserve electricity usage/production that the utility has no financial reason to do.

The regulators have to "buy" the corporations cooperation.

The regulators "buy" this cooperation with financial incentive, namely additional profit for the corporation. No corporation will pass up that kind of leverage opportunity, and will seek the highest price they can to have their cooperation "bought" especially in a highly regulated environment when such opportunities are few and far between.

All the money, the profit, the incentive paid to the corporation to cooperate and conserve, comes from we the consumer in whatever form it may take. And it will take many forms.



As for "What I would do", phrase it an applicable analogy and I will. Your was not applicable.

We both know that it is an apt analogy but you also know it shows the emptiness of your claims.

"I can just imagine what you'd do if the government signed a contract with you for delivery of 100 million units of a given product, and then - after you borrow the money and build the facilities to manufacture the product and after you contract with all the suppliers you need to build 100 million units - the government said to you "Sorry, we've decided that we are going to dramatically reduce the amount we agreed to pay you"."

The government is not signing a contract to purchase x units of my product. They are simply setting my price ceiling I can charge consumers for a unit of my product.


"They explain that your product isn't as environmentally friendly and ask you to absorb all the losses as they phase in the more environmentally friendly product. Since they are appealing to you to take the loss on the principal of concern over the broader public welfare, I'm sure you are going to be consistent with the values you are claiming and agree to invalidate the original contract, right?""

The government is not telling me they will not pay what they agreed, they are coming to me on bended knee asking me to go out and convince my customers not to purchase and consume as much of my product because they have been unable to convince my customers to do so themselves. They desire my cooperation and assistance to accomplish this political goal, less use of my product, which is against my interests.


Your analogy is inept and does not apply to the situation.

The utilities are REGULATED MONOPOLIES. The vertical integration has been unbundled to a degree but when a power purchase agreement is signed it is a contract to purchase X amount of product for Y amount of time at Z price schedule.

Your objections are both moot since the government can direct that that the conservation/efficiency improvements be enacted without regard your needs if they were insane enough to want to drive the suppliers into bankruptcy.

You sure are tying hard not to address the meat of that question.



"I can just imagine what you'd do if the government signed a contract with you for delivery of 100 million units of a given product, and then - after you borrow the money and build the facilities to manufacture the product and after you contract with all the suppliers you need to build 100 million units - the government said to you "Sorry, we've decided that we are going to dramatically reduce the amount we agreed to pay you". They explain that your product isn't as environmentally friendly and ask you to absorb all the losses as they phase in the more environmentally friendly product. Since they are appealing to you to take the loss on the principal of concern over the broader public welfare, I'm sure you are going to be consistent with the values you are claiming and agree to invalidate the original contract, right?""

Wrong again.

The regulation agreement simply places a cap on how much I can charge per unit consumed.

Regulators refer to my fixed costs over a period of time and my variable costs like cost of fuel, and set the maximum rate I can sell a unit of product to a consumer. Leaving adjustment room for fuel costs if they rise. They do not contract to buy X units amount me.

Under cost plus regulation, if consumers do not buy as much as was guessed, I lose money as a utility. If they buy more than was guessed I make more money. There is no such contract to purchase X amount for Y time. Only a rate cap value that is simply calculated by guessing consumers will buy X amount over Y time.

Meaning as a utility it is in my best interest to convince consumers, my customers, to use as much of my product as possible. More profit for me.



Now the regulators come to me and say "we want you to convince your customers to use less of your product" and my response is no, not unless we move away from cost plus, decouple revenue from amount of product consumed, and give me different ways to make profit by selling less product.

And regulators are doing just that.




A "power purchase agreement" is more commonly used by a utility to purchase power from a generator. As in PG&E signs a power purchase agreement with a wind farm operator, or solar farm operator for purchase of X units over X time.

Or as Wiki states...

"A Power Purchase Agreement (PPA) is a legal contract between an electricity generator (provider) and a power purchaser (host). The power purchaser purchases energy, and sometimes also capacity and/or ancillary services, from the electricity generator. Such agreements play a key role in the financing of independently owned (i.e. not owned by a utility) electricity generating assets.

The seller under the PPA is typically an independent power producer, or "IPP." Energy sales by regulated utilities are typically highly regulated, so that no PPA (power purchase agreement) is required or appropriate."

http://en.wikipedia.org/wiki/Power_Purchase_Agreement


Your analogy is ridiculously inept.


Regardless your original statement...

"The more accurately any market can match demand to supply, the more efficiency it can operate. The more efficiently it can operate, the lower the total costs. Since virtually all utilities are regulated on a cost plus basis, savings of this nature go directly to the consumer.

Time of day pricing also encourages more efficient use of electricity and, as you say, conservation. Both work to lower the overall costs which are, as noted, passed on to the consumer."

Is patently false, as if utility revenue remains the same and is "protected", and usage(sales) is less, obviously not all savings from less consumption is going to be passed on to the consumer, and not "virtually all" utilities are on cost plus regulation.

Which as I said, is a big reason the utilities are on board on this, selling less power, same revenue, more money for them.

Obviously you haven't.

Perhaps you should look it up.

You should explain what it has to do with your statement...

"The more accurately any market can match demand to supply, the more efficiency it can operate. The more efficiently it can operate, the lower the total costs. Since virtually all utilities are regulated on a cost plus basis, savings of this nature go directly to the consumer.

Time of day pricing also encourages more efficient use of electricity and, as you say, conservation. Both work to lower the overall costs which are, as noted, passed on to the consumer."

When clearly not all the cost savings will be passed on to the consumer.

Which is my statement that you challenged, specifically that one big reason utilities are on board, is increased profits.

While some savings will be passed to consumers, clearly some will not, and will passed to the utilities bottom line instead.

That you don't understand the way unbundling applies to your previous argument says the rest.

I live in a state with our own grid, the state unbundled our services years ago when restructuring and deregulating.

It has nothing to do with the fact that all savings are not passed on to the consumer when the utility is decoupled, and services unbundled and smart grid is installed as you claimed.

It has nothing to do with the fact that regulators do not purchase product, but only regulate prices.

You have provided zero evidence or credible argument for your claim that all cost savings are passed on to consumers. It's a laughable position to take.

The only case in where all cost savings are passed on to consumers is the case of a non profit utility. They happen to be fairly common in Texas, I don't know how common they are in places like NY, CA, FL etc.


Yet another case of you kneejerking a response to some perceived slight of alternative energy, which wasn't the case, and struggling to make some inane point on some unrelated tangent.

Because of that it's an attractive feature for protecting their bottom line. While decoupling and smart meters may incentivize efficiency, the shutoff capability itself is simply a tool. It will be used for revenue-protection purposes whether the regulatory environment is decoupled or not.

Since the main class of customers who default on payments are the poor, it will be used for revenue protection primarily against the poor. In order to counteract this impact, regulators need to have clear policies on the issue of shut-off. Many poor today rely on there being some slack and inefficiency in the system. If we want to preserve their breathing room we will need to do so explicitly rather than by benign neglect. That could prompt some rather uncomfortable ideological discussions on the rights and obligations of the poor vs. the utilities.

I.e. it contributes to raising profit levels above what they would have been had the exposure remained? And doesn't that "pad" (or increase) profit levels?

Utilities have two competing sets of stakeholders to satisfy financially. One is the customer (satisfied by lower prices) the other is shareholders (satisfied by higher profits). The corporation has a responsibility to both. The problem is that the responsibility to customers is ethical while the responsibility to shareholders is fiduciary. Absent strong regulations about both profit margins and customer rights, guess which interest wins, legally speaking?

The regulators account for bad debt in the profit structure. The fiduciary responsibility to investors is met under the supervision of the regulatory agencies; these companies do not have the same free hand that a company operating in a competitive environment has. They are a low risk - low yield type of investment - even the game Monopoly got that right.

A smart grid and conservation cannot exist under the Cost plus regulation scheme of old.

And as we see in this case, decoupling means neither revenues nor profits are now coupled with costs of production or operation.

So bad debt in a decoupled regulatory scheme is not accounted for, it's not meant to be. It's an area left free for the utility to use to pad profits by disconnecting people remotely by computer to save costs, and pad profits.

More money for them.

and cost plus regulated prices are the pea. Local utilty regulaters vs international corporations is a match made in heaven for the corporations. Companies are spun off, consolidated and passed back and forth among holding companies. Massive borrowing and stock floats generate huge profits for vampire capitalists outside the purview of local regulatory commissions. These businesses are no longer about power generation. They are about profit generation; capturing as much of the consumer's cash as possible. For 2005 median gross utility profits were 24%. It's a jungle out there, and all you're seeing are the trees.

You accuse others of dishonesty and then make a slimey dishonest attempt to hoodwink people.


In accounting, gross profit or sales profit is the difference between revenue and the cost of making a product or providing a service, before deducting overhead, payroll, taxation, and interest payments. Note that this is different from operating profit (earnings before interest and taxes).
en.wikipedia.org/wiki/Gross_profit

In business and finance accounting, net profit is equal to the gross profit minus overheads minus interest payable plus/minus one off items for a given time period (usually: accounting period).
en.wikipedia.org/wiki/Net_profit

Rob Zenilman submits: Normalized net profit margins in the Utility sector for the most recently reported quarter ranged from 20.5% (TXU) down to -5.9% (RRI), with a median value of 5.9%
http://seekingalpha.com/article/11201-chart-utility-stocks-normalized-net-profit-margins

Here is a word about the outlier - TXU (now called Future Energy) Note that their profit numbers include a large number of *competitive* ventures outside of the regulated areas of the energy business.

About Energy Future Holdings

Energy Future Holdings Corp., formerly named TXU Corp., is a Dallas-based energy holding company, with a portfolio of competitive and regulated energy subsidiaries, primarily in Texas, including TXU Energy, Luminant and Oncor. TXU Energy is a competitive retailer that provides electricity and related services to 2.1 million electricity customers in Texas. Luminant is a competitive power generation business, including mining, wholesale marketing and trading, construction and development operations. Luminant has over 18,300 MW of generation in Texas, including 2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity. Luminant is also the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States. Oncor is a regulated electric distribution and transmission business that uses superior asset management skills to provide reliable electricity delivery to consumers. Oncor operates the largest distribution and transmission system in Texas, providing power to three million electric delivery points over more than 101,000 miles of distribution and 14,000 miles of transmission lines. While Oncor is a subsidiary of EFH, Oncor reports to a separate and independent board. Visit www.energyfutureholdings.com for more information.

They operate under a decoupled scheme.

They make just as much money selling less power. Smart meters with variable pricing will only increase that margin.

Also see post 60

Hmm kinda says it's specifically about PG&E to me.

At least not by me.

Only assumed by your usual twisted assumptive misreading.

What this conversation was actually spawned from was your reply that this doesn't mean more money for the utility.

Arguing my statement specifically.. which began this conversation about utility regulation and profits.

This is why I advocate solar shingles so much, because I know that while they may not be a big contributor to ones electrical generation, at least you're using your own power when you can, rather than relying on some controlled grid.

The dynamic at work is that one group of businesses (largely under government regulation because of their monopolistic nature) stands to lose. Another group of SEPARATE businesses stand to win.

The first group operate, as I said, in a basically monopolistic structure (google "electricity natural monopoly") so they have control of the consumer and the regulatory fix is the best that can be done.

Those businesses providing solar panels for example, operate in a competitive environment where they are ultimately forced by competition to sell their product at a small fraction above the lowest price the panels can be produced for.

The inherently monopolistic nature of centralized generation of power is the problem.

The power companies profit every single month, when I turn on my air conditioner because their CO2 emissions are causing the world to warm up and for summers to last longer.

You have a terrible habit of not paying attention and not thinking anything through.

IF the solar panels had a monopolistic business, you'd not be able to buy the panels for a price that is not related to their aggregate output of power over time. If they had a monopolistic business structure you'd be paying for the power itself. They only sell the panels because they are in a competitive environment.

Remember that discussion? They were trying to control the fucking solar panels!

...than GWB or McCain.

You have poorly evaluated the consequences of time of day pricing and now you try to attack me on the basis of your own drug induced stupidity.

A low income family has a time of day pricing plan from their utility.

They note that the use of power between 2-4 in the afternoon is 30X the price per kwh they used to pay on the average plan.

They also note that the price of power the rest of the day and night is either the same /kwh as they used to pay or 1/5 to 1/3 of the price they used to pay.

So, they decide that they can turn off their air condition for two hours each day, and their total electric bill will be 1/2 of what it used to be. If they want to run their AC their total electric bill should be the same or a little bit less than it used to be since other, more frugal people have decided to do without their AC in that peak period, thus reducing the demand and consequently the peak price.

I know it is really complicated for you Josh and that thinking something through is one of your biggest challenges, but you really need to think about it when you are straight and see if it you can get it.

I got my numbers from here: http://www.pge.com/tariffs/ResTOUCurrent.xls

I assumed 10,000 kWh annually for easy math (a little below US average for a typical household).

The numbers: 1.14 kWh an hour (10,000 kWh / 365 days / 24 hours).

6 hours peak, 18 hours off peak, from the Excel file.

TOU CARE in summer:

$800 baseline at $.08 kWh for 10,000 kWh.

$699 peak at $.28 per kWh.

$449 off peak at $.06 per kWh.

TOU $1148 annually for 10,000 kWh.

A 30% increase in costs if poor people don't change their behavior.

TOU residential in summer:

$1800 baseline at $.18 kWh for 10,000 kWh.

$749 peak at $.30 per kWh.

$674 off peak at $.09 per kWh.

TOU $1423 annually for 10,000 kWh.

A 26% decrease in costs if wealthy people don't change their behavior.

What does the 1.14 kwh/hour mean and where do you get it?

How have you arrived at a difference in rich and poor?

What is this "baseline number and price you've derived supposed to represent? As I see it that is *probably* a category that groups users by their total annual usage with "baseline" being the lowest quantity users.

Where did you get the 6/18 hour division for peak/off peak?

What, to you, does the tiered pricing represent?

How did you choose the specifics for your calculations?

Here is what I get doing a similar exercise with just the information presented on the spreadsheet:

Residential Time-of-Use Schedule E-6 since it has peak, part-peak, and off-peak (P, PP, and OP) and tier 1 since it is most likely the tier for low usage amount (AKA low income) customers.

The average California home uses about 600kwh/month or 7200kwh per year. Since this is a PG&E schedule, I'll use that estimate.

7200kwh/8760 annual hours = average flow of 822 w/h.

I'm going to assume for the summer hours part peak is 6 hours daily (6-8am, noon-2pm, and 4-6pm), peak is 2 hours (2-4pm), and of peak is 16 hours since that generally conforms to the typical demand curve.

Therefore, daily amounts used are:
Peak: 1.7kwh
Part peak: 4.9kwh
Off peak: 13.2kwh

Summer from May-October inclusive = 184 days
Winter Nov-April inclusive = 181 days

Summer peak 1.7X 184 X $0.30142 = $94.28

Summer part peak 4.9 X 184 X $0.14863 = $134.00

Summer off peak 13.2 X 184 X $0.087 = $211.31

Total TOU per summer = $439.59

Using the "average total rate" (final column) of $0.18675/kwh that same total would be: $824.69
That probably includes an average of all 5 tiers, which goes much, much higher than the tier 1 numbers (a discount for low income?)

Difference: -$385.10 favor of TOU.

Winter only has part peak (I'll use 8 hours) and off peak (16 hours):

Winter part peak = (8 X 822) = 6.6kwh X 181 X $0.10319 = $123.27

Winter off peak = 13.2kwh X 181 X $0.09112 = $217.70

Total = $340.97

Using the "average total rate" (final column) of $0.18675/kwh that same total number of winter hours would be: $811.24
Difference: -470.27 favor of TOU over flat average.
For the year that is $855.38 in favor of TOU over the flat average.

Like you I've probably made several unwarranted assumptions (I could name at least 2), but since I've I'd made this effort to demonstrate that your "analysis" isn't something that supports your assertions, and since you've made even more I'll just go with what I have.

The other analysis was based on a 10,000 kWh annual average, which is where the 1.14 number came from, I was multiplying it by the various hours of usage and cost (it's easy to reproduce, but I will show my math more clearly here). And I was extrapolating summer over the whole year. I chose Residential Time-of-Use Schedule E-7 becuase it has the fairest, in my opinion, curve of utilization (it doesn't tier). I could be wrong, I would have to do the calculations.

Whatever my conclusion is I will post it, even if it doesn't fit my intuition (I geniunely wasn't trying to fix the numbers with my original quick and very dirty analysis).

I'll use this image for the utilization curve (residential):



It's based on a report here: http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-300-96/

Because the report is almost 20 years old I decided to simply use it as a guide, since it does match more modern images:



I will not use the *numbers* in the graph, because they're obviously wrong because technology is more efficient these days.

The Excel file here has the E6 peak, part peak, and off peak hours (it's the third tab in Excel if you didn't notice): http://www.pge.com/tariffs/ResTOUCurrent.xls

They are as follows (copied pasted directly from the spreadsheet);

Summer (May-October)
Peak:
1:00 pm to 7:00 pm Monday through Friday
Partial-Peak:
10:00 am to 1:00 pm Monday through Friday
7:00 pm to 9:00 pm Monday through Friday
5:00 pm to 8:00 pm Saturday and Sunday
Off-Peak:
All Other Hours Including Holidays

Winter (November-April)
Partial Peak: 5:00 pm to 8:00 pm Monday through Friday
Off-Peak: All Other Hours Including Holidays

I will ignore Holidays for the calculation as I don't know which ones are recognized by PG&E.

52 days of the summer are partial peak 3 hours a day (weekends).
52 days of the summer are off peak 21 hours a day (weekends).
130 days of the summer are partial peak 5 hours a day.
130 days of the summer are full peak 6 hours a day.
130 days of the summer are off peak 13 hours a day.

130 days of the winter are partial peak 3 hours a day.

So now we have our numbers, but we need to apply our graph.

As you demonstrated, the average hourly energy flow is about 822 w/h. But this is an average. Since CA is very much up to standards on energy usage let's assume 60 watts flat.

The graph I'm using is this one, if you stretch it out it matches the other one very well, even though it's old.



Looking again at the graph I will bottom it out at 4AM at 60 w/h. So on this graph 1000 = 60. Each number on the left can be recalculated by doing n-1000+60. I used a select tool in an image viewing program (XnView) to "square off" the dots and match them up with the left hand numbers. All of the numbers are included if you disagree with any of them.

1AM 1250-1000+60 = 310 w/h
2AM 1125-1000+60 = 185 w/h
3AM 1000-1000+60 = 60 w/h
4AM 1000-1000+60 = 60 w/h
5AM 1000-1000+60 = 60 w/h
6AM 1250-1000+60 = 310 w/h
7AM 1625-1000+60 = 685 w/h
8AM 1625-1000+60 = 685 w/h
9AM 1625-1000+60 = 685 w/h
10AM 1625-1000+60 = 685 w/h
11AM 1750-1000+60 = 810 w/h
12PM 1875-1000+60 = 935 w/h
1PM 2000-1000+60 = 1060 w/h
2PM 2000-1000+60 = 1060 w/h
3PM 2000-1000+60 = 1060 w/h
4PM 2000-1000+60 = 1060 w/h
5PM 2125-1000+60 = 1185 w/h
6PM 2250-1000+60 = 1310 w/h
7PM 2375-1000+60 = 1435 w/h
8PM 2500-1000+60 = 1560 w/h
9PM 2500-1000+60 = 1560 w/h
10PM 2125-1000+60 = 1185 w/h
11PM 2000-1000+60 = 1060 w/h
12PM 1625-1000+60 = 685 w/h

(310+185+(60*3)+310+(685*4)+810+935+(1060*4)+1185+1310+1435+(1560*2)+1185+1060+685) / 24 = 820 a very good fit to the 822 w/h flux.

Here's a graph of the above series:

Peak:
(1060*4)+1185+1310 or 6.735 kWh.
Partial Peak (weekdays):
685+810+935 + 1435+(1560*2) or 6.985 kWh.
Off peak:
(310+185+(60*3)+310+(685*3)+1185+1060+685) or 5.970 kWh.

(6735+6985+5970) / 24 = 820

Just checking, because you will probably be pissed that off peak has fewer utilized hours than on peak.

So, using your math:

6.735 * 130 * $0.30142 = $263.90
6.985 * 130 * $0.14865 = $134.98
5.970 * 130 * $0.087 = $67.52

$466 TOU.

(6.735+6.985+5.970) * 130 * .18

$460 flat rate. When you add in weekends, TOU probably wins very nicely.

The CARE plan is not so fruitful:

6.735 * 130 * 0.20776 = $181.90
6.985 * 130 * 0.10223 = $92.82
5.970 * 130 * 0.05964 = $46.28

$320 TOU.

(6.735+6.985+5.970) * 130 * .08

$204 flat rate.

No confirmation bias here, it does seem to equal out in the end, however, further analysis would do good to look at what the Tiering does. For example, if you go over 12 kWh in certain areas (in one day) you are looking at $0.45 per kWh. On a really really hot day this is easily done (and golly we're looking at one warm summer this year, and they won't get better over a long time).

Here is some additional information:
The income qualifications for CARE program are here http://www.pge.com/myhome/customerservice/financialassistance/care/eligibility/

This page shows how they tailor their programs to the individual user categories.
http://www.pge.com/tariffs/ERS.SHTML

Baseline information:
http://www.pge.com/myhome/customerservice/financialassistance/medicalbaseline/understand/index.shtml

The intent of these programs isn't to gouge customers, it is to apply the basic idea that by giving individuals accurate pricing signals they can choose to spend their money as they think best suites their circumstances. Does it suck to be poor? Sure. Does this exploit the poor? No. In the long run it helps by reducing the overall cost of providing electricity, and that savings will get passed on to the consumer.

BTW, did you know that most ISOs have hourly data sets publicly available for all sorts of information? It is aggregate data on the demand side, but they will usually have nodal pricing (specific locations where the electricity is priced in accordance with local generation/distribution/transmission/demand factored in) that allows you to fine tune an analysis like this. You might have to call the utility to find the URL since you have to know the exact terms they use for posting the data.

Wish I could find them because obviously my graph doesn't fit exactly (a bit high during the uptick, averages out in the end since it's a smaller sample, but I still don't like the hack I had to do).

Especially for the reasons you're doing it.

As I said, you might have to contact the appropriate ISO to find out where they store it.

Take a look here and see what you find http://www.pjm.com/markets-and-operations/etools.aspx

TOU CARE in summer:

$800 baseline at $.08 per kWh.

$466 for 4 hours of peak at $.28 per kWh.

$449 off peak at $.06 per kWh.

TOU $915 annually for 9,167 kWh. (We removed 2*1.14*365 kWh from the equation.)

$49 for the kWh not used in original peak equation (edit: assuming off peak at $.06 per kWh):

TOU $964 annually for 10,000 kWh.

A 17% increase in costs if poor people change their behavior. As I said, they have to fucking turn off their air conditioners.

Though I just noticed that the tiers just apply to the non-CARE options. That's good.

edit: wow! As low as 8 kWh for the baseline in some territories. Holy shit. No wonder people are making really vitriolic comments on that SFGate article. I haven't lived in CA in almost a decade, this is crazy. Holy crap.