The Nevada state government has just ruined solar energy in their state. From here,

Although Nevada is one of the sunniest places in the world, there has recently been a dark cloud hovering over the rooftop solar industry in the state. Just before Christmas, Nevada’s public utility commission (PUC) gave the state’s only power company, NV Energy, permission to charge higher rates and fees to solar panel users – a move that immediately shattered the rooftop solar industry’s business model.

In addition to the new monthly fee, … customers … will get less back from the utility for energy their solar panels capture and feed into the main power grid. Whereas previously they received full retail value for their surplus electricity, soon NV Energy will only pay a third of that price for exported electricity.

Now, if you live in one of the sunniest states in the US, it is no longer worth it to put solar panels on your roof.

This is part of a national fight over solar energy. In some states, nefarious forces are working toward making it a bad idea to put solar panels on your home or business. In other states, forces for the good are working to make home or business rooftop solar a good idea.

There is a larger scale political divide in this country, with Republicans, Libertarians, and Tea Partiers (overlapping groups) on one side and Democrats and environmentalists on the other. The former is against shifting to clean energy and addressing global climate disruption. The latter is working towards shifting away from fossil fuels and addressing climate disruption.

Current and recommended books on climate change.

But a big part of this makes no sense. Those solar panels you may choose, as in individual or small business owner, to put on your roof constitute your way of utilizing your sun. Yes, that sun that falls on your house is not the property of the government, or big corporations, or politicians bought and paid for by big corporations. That is your sunlight, and THE GOVERNMENT SHOULD NOT INTERFERE WITH YOUR USE OF IT TO POWER YOUR OWN HOME.

Public utilities are there to serve the public, and you are part of the public. Those entities, and the state government agencies that regulate them, should not be conspiring to take away your volts. Your Freedom Volts. They should not be stopping you from installing your solar panels … your Patriot Panels … on your own roof.

So why have the Libertarians and their kin not been fighting this? Why have self described “Patriots” not taken up arms, figuratively one would hope, against the nefarious forces that seek to control YOUR access to your OWN ENERGY?

I suspect that eventually they will. Among those who do put up solar panels there must be some who do so to for their own sensible financial reasons. There must be some people who benefit from rooftop solar who are not Democrats or environmentalists, but rather, sensible Republicans or Libertarians who are in it for the FREEDOM, the financial savings, and also, just because it is cool to make your own energy. Perhaps we will see the KINDLING OF FREEDOM among these self sufficient patriots. Perhaps we will see a demand from the right, not just the left, to LEAVE OUR FREEDOM VOLTS ALONE!



  1. #1 Desertphile
    January 14, 2016

    If I were a electric utility company, I would *LOVE* to have roof-top power sold to me: it means I would spend less money to serve my customers. I would be a broker as well as producer. Eventually utility companies will be paid to distribute electricity, not produce it: this is the new reality, and utility companies need to get used to the idea—- the utility companies that do so the soonest will reap the rewards.

  2. #2 Young CC Prof
    January 14, 2016

    To be fair, when a large enough percentage of users install solar panels, buying solar at retail prices no longer works. The power company still needs to maintain the grid, which costs something, and more fundamentally, the solar customers all want to buy during the day and sell at night, which means they’ve got to maintain a plant, either hydroelectric, nuclear, or fossil fuel. Yes, total demand is higher during the day, but night demand is still substantial.

    All that being said, buying solar electricity at only a third of retail and charging a $40 flat fee per month is crazy. That can’t be based on any rational accounting, they’re now using solar users to subsidize non-solar users.

    It sounds like the state created some really solar-friendly policies, convinced a lot of residents to put up panels, and now they’re switching tracks, essentially stealing the value of the investments homeowners made and giving it to the electric company.

  3. #3 Desertphile
    January 14, 2016

    As for Nevada, fuck them: there should be, and soon will be, a federal program that stimulates roof-top solar. The state government will be wo4rked around.

  4. #4 L.Long
    January 14, 2016

    Most criminal activity is partially supported by the state.
    You are given this example, although the war on drugs produces far more crooked direct income to the state.

  5. #5 Eric Lund
    January 14, 2016

    The historical reason for heavily regulating utility companies is that, generally speaking, they are the only available seller of electricity (or natural gas or water) in the area, for the good reason that for another company to duplicate the necessary infrastructure would be both expensive and wasteful. Monopolies, of course, will sell their product for as high a price as they are allowed. State PUCs were created in order to ensure that such infrastructure would be built, and the company that built it would be able to recover their costs over a reasonable amount of time without overcharging their customers. That logic still holds when small producers like individual households want to sell excess generated power: there is only one buyer, who will pay as little for the product as it is allowed. The state PUC is supposed to prevent exactly this kind of gouging.

  6. #6 Greg Laden
    January 14, 2016

    Young CC prof, nice theory but that is not how it is working out in states like Minnesota.

    Retail costs are already high enough that brokering electricity only requires a small percentage profit (look at your electricity bill, you are buying more than electricity).

    It is true that once every single rooftop is plastered with solar panels, that electricity will be worth a lot less. We are so far from that point that this should not be a factor at this point.

    Desertphile yeah, I tend to agree but I want the federal system to be put in place by Democrats, not Republithugs.

  7. #7 SteveP
    So. New England
    January 14, 2016

    If I am not mistaken, ALEC, the KOCH funded American Legislative Exchange Council, has their finger in this. I think that we of the science tribe need to get more involved in our local politics, or we are liable to find ourselves similarly outmaneuvered in other areas by the slimy ALEC Kochroaches who perpetrate this kind of crap.

    I am nearing the end of my first year with PV solar on my roof. Thus far I’ve sold the utility more electricity than they’ve sold me and we are past the winter solstice, so in a few months I should be able to see what they are going to pay me for the excess electricity that I’ve sold to them. I think I had better contact my local state representative to see what I can do to fight ALEC here.

  8. #8 Art
    January 14, 2016

    Returning full retail rates would indeed promote more solar use. But it has to be pointed out that these electric customers, they are still customers, are not actually installing complete solar power systems. Typically these people are installing the collector panels and an inverter/controller. There is no power storage. They are depending on the POCO (power company) to supply power at night, during cloudy periods, and for exceptional power use … like when your son comes home from college with twenty loads of laundry to wash and dry.

    If you want to go solar without POCO interference do it. The key here is that we are talking about a cheap solar setups that don’t include battery banks. Systems that use the POCO as training wheels. The Gadsden flag is ironic. If you want to be independent be independent. Don’t demand that the POCO buy your leftovers at full freight, when and if you have any, entirely on your schedule, whether or not they need it at the time. If you want to to go full solar get the batteries. If you want to play at being a POCO , and get POCO rates, be prepared to deliver consistent power.

    Most POCOs easily meet 99.9% availability standards. This in addition to maintaining the miles of drops and lines necessary to get POCO power to your house and, potentially, your solar power to the grid. Linemen are typically nice guys, but very few of them work for free, particularly when they are called out after an ice storm, tornado, or hurricane.

    There is also the matter of safety. Long ago, before solar and other complicated electrical systems that can back-feed, the linemen could disconnect the lines on the utility side of an area and work it all knowing it was all safely disconnected. They could work fast and efficiently.

    With solar power being installed at spots the POCO doesn’t know about, and each installation potentially feeding power back up the drop, and coming out as 4160 or 7200 volts because transformers work both ways, linemen are much less able to predict what might be live of dead. Linemen are forced to work everything as if it is live because you just never know any more.

    Rigging grounds, using hot-sticks, working in heavy gloves and sleeves, and working at the measured and methodical pace consistent with dealing with things that can kill you slows everything down. Productivity suffers. Costs rise. Reality raises its ugly head.

    I don’t know about Nevada but I’ve read that in most localities your house pretty much has to be at least set up to be connected to the grid. To get a loan and FHA approval you need a drop from the nearest pole, a riser, and a meter ready to be connected to the power panel. You may need to set a meter for testing to meet building inspection but once signed off on you can have the meter pulled and the socket blanked.

    Of course, once completely disconnected from the grid you are going to need power storage, batteries. So figure several thousand dollars more for batteries. And you are going to want to learn how to maintain them. Most people kill their first set of batteries because they just don’t know how to maintain them. So figure on buying a second set in a couple of years.

    Like I said, the Gadsden flag is ironic. It is being used by people who want to play at independence without taking on the real costs of independence.

    I am pro-solar. I think solar is the way of the future. I work in the electrical trade and have helped install and manage solar power systems.

    The bottom line here is that this is a complaint from people who want to slap a few panels on their house and have a quick and dirty way of feeling good about their power use while the POCO picks up the tab when their system fails to be sufficient. You are using their lines and inflicting costs. You can’t have it both ways. Take the deal (A fee for line maintenance and $.33 on the dollars for backfed power doesn’t sound unreasonable) or disconnect completely. Nobody ever said independence was cheap or easy.

    Some of this might have to do with location. I’m in Florida, a state where AC is usually the peak load. Fortunately the peak cooling loads are usually timed well enough with peak solar output. The POCO is happy to buy the power back.

    If the local climate is colder the peak electrical load may fall at solar minimum. In that case you are asking the POCO to buy power at full price when it doesn’t need it while giving it back in a one-for-one exchange when the POCO is scrambling to meet demand and having to buy bulk power from other regional producers at peak price.

  9. #9 Desertphile
    January 14, 2016

    Eric Lund: That logic still holds when small producers like individual households want to sell excess generated power: there is only one buyer, who will pay as little for the product as it is allowed. The state PUC is supposed to prevent exactly this kind of gouging.

    Indeed, perhaps the most valuable asset a utility company has is the right-of-way (easements) on public property as well as private property. Any competing power supplier may have to wait 100 years to get similar easements.

    The time will come when root-top solar will saturate the market, rendering distribution of electricity the chief function of power utilities. Nevada is backward-looking, trying to delay the inevitable.

  10. #10 Desertphile
    January 14, 2016

    Desertphile yeah, I tend to agree but I want the federal system to be put in place by Democrats, not Republithugs.

    Alas, I would like to see everyone in government working towards that goal. Large-scale solar, on public land, is backwards-thinking: the future is roof-top, hyper-distributed power production, owned by the people who produce it. The Republican Party wants wealth to “trickle up” to the wealthy, and that dog will soon no longer hunt.

  11. #11 John Mashey
    January 14, 2016

    Arr has many good points, I’ve heard similar things at Stanford seminars.
    I’m a big fan of solar, but it doesn’t work everywhere (like amidst trees), but it is really not very cost-efficient for everybody to go off-grid.
    1) You need a lot of local storage, and you lose the load-balancing from he grid and *its* storage.

    2) What really needs to happen is that state PUCs (who control this) need to change their rules to incentivize the electricity generators, grid providers and customers to do the “right thing” to evolve towards fossil-free electricity.
    (i.e., utility rate “decoupling”, variable pricing, etc.)

    3) That almost certainly means a mix of:
    a) Grid-connected homes and other buildings, with solar where it makes any sense, which reduce the load on parts of distribution system, even as they do complexify the management and safety issues.
    b) Utility scale generation by solar, wind, geothermal, hydro, etc, plus utility-scale storage.

    4) But utilities must be fairly compensated for real services they provide. People expect downed power lines to get fixed quickly, which has certain requirements on staffing and equipment.
    (El Nino will cause power outages here anmidst the trees, but we live slightly nearer the substation than a nearby school, which is very useful, because outages get fixed fast.)

    5) CA of course incentivizes rooftop solar … but also utility storage, and has done rate decoupling for a long time. AS one past PG&E President often told others: don’t expect utilities to change the incentivizes away from “generate as many MWh as you can”.

    6) The telephone system has many parallels.

  12. #12 Greg Laden
    January 14, 2016

    First off, rooftop solar can’t be both not very big in what it produces and a big problem for utilities to fold into their system. That is just an excuse. Very very few individual home owners are going to do anything with rooftop solar than fully insulating, changing appliance types, and a few other things are going to do, possibly times two in some cases. People are swithcing to electric appliances and electric or plug in cars, and we are encouraging that. In northern states, most of the rooftop PV will be made during the day in the summer, and that is the exact time there is a huge load requirement from cities for AC in big buildings. Rooftop PV is a small but useful offset for that, and will continue to be so even if most homeowners throw up a bunch of panels. It just simply is not an issue.

    One thing PUV’s can do, and this is happening big time in Minnesota, is to help develop community PV. This allows for more investment in technologies that might help with timing of availability and use, and storage. In an environment in which the average homeowners is being told by the Gummit to not put even a panel or two on the roof, that is not going to happen.

    Beyond that, if rooftop PV’s start to produce “too much” electricity, it is necessary for the utilities to figure out how to balance that out using the larger scale systems at their disposal. That is what they are there for. Load balancing has always been their job, and yes, the job is now becoming more complicated. But that is what they have to do.

  13. #13 skeptictmac57
    January 14, 2016

    I would propose that a fair way to deal with this would be for EVERY home connected to the grid to pay the same access fee that represented the cost of maintaining the grid. And separate from that the customers would pay the retail price for energy used, and the utilities would buy at the same rate, all energy provided to the grid, whether it be from a solar customer or large provider.
    The fees that NV is proposing are actually higher than my entire utility monthly bill is (except for summer months) and that includes energy use, taxes, and access fees. That is some racket they are running there, and I smell a lawsuit in the making. I payed $38 last month.

  14. #14 John Mashey
    January 14, 2016

    1) This is like big software that has bugs and needs to be seriously reworked, or infrastructure that needs to evolve, while still working. There are 2 approaches:
    a) Keep fixing bugs, patchwork-wise.
    b) Look forward as far as you can, create a target for where you’d like to get, and then evaluate changes to steer in that direction, knowing you’ll have guessed wrong, especially for longer timeframes.
    Don’t build stuff that will likely get replaced quickly.

    2) Again, I’d claim that the biggest challenge is misincentives from PUCs that either have been captured by fossil entities, utilities, or are jsut slow to move, because it is quite clear that in US, state policies drive much of this, and vary widely. For instance, the “Sunshine State really ought to have a few more solar panels. Maybe that will change soon.

    NV’s move is especially nuts, given the terrific solar resource and lots of empty space for it, not just on rooftops.

    3) With better rules, incentives might align better, at least for utilities and customers.
    According to EIA,
    “In 2014, the average annual electricity consumption for a U.S. residential utility customer was 10,932 kilowatthours (kWh), an average of 911 kWh per month. Louisiana had the highest annual consumption at 15,497 kWh per residential customer, and Hawaii had the lowest at 6,077 kWh per residential customer.”

    So, average is about 30KWh/day … ~same amount as newest NIssan Leaf.
    That looks like a market to me. Right now, utilities don’t get a lot of revenue from gas-powered cars.

    Then there are the numerous financial engineering setups, in which (other) companies install your panels with no upfront cost, you get cheaper electricity, and they make money, with minimal fuss to the homeowner.

    That looks like another market to me that utilities could be in, as they already have a lot of the pieces. Really, how many people want to select solar panels and other gear, figure out finances, install them, etc, etc? (Well, there are some, but I think most people want electricity to be always available and reasonably inexpensive,

    Assuming endpoint was 100% net-zero houses (fantasy goal, but no reason new houses can’t be built that way in many climates (if they can do passivhaus in Germany…)) and 100% electric cars, I don’t think urban houses have enough rooftop space to do all that…. so the grid will be around for a long time.

    But again, for better or worse in the US, this is a state PUC thing, not “the government” in general.

  15. #15 Young CC Prof
    January 14, 2016

    @skeptictmac57: I like your suggestion. If there are going to be grid maintenance fees, all residential users should pay the same. Let’s see what the actual grid maintenance cost is. (Hint: It’s not $40 per household per month. I mean, my electric bill for the whole family is only about $100, and electricity prices are high around here.)

  16. #16 Rolf Aalberg
    January 15, 2016

    I haven’t read all the comments, but what we do here in Norway is to pay one price for the power, and cost added for use of the grid. A fixed fee regardless of usage doesn’t seem reasonable.

  17. #17 John Mashey
    January 15, 2016

    Can you explain more, since the wording is slightly ambiguous.
    Is the grid charge:
    a) Fixed for everybody and the same?
    (If not the same, how is it figured.)

    b) Some function of power use?

    For instance, could be max(base, X^power), so everybody pays at least base.

    Of course, Norway is an oddly-important example, given the extreme encouragement of electric vehicles, happy turf for Tesla.

  18. #18 cosmicomics
    January 15, 2016

    In Denmark the grid and the supplier are separate, and some of our fees are fixed and independent of consumption: transmission fees, subscription fees. Different companies have slightly different billing practices. I don’t use that much electricity, so I don’t focus on the price. What interests me more is an electricity supply based on renewables. I changed companies last year when my old company made some regressive changes that encouraged higher consumption and eliminated the preferably from renewables option.

    As I’ve written before, I think that the energy we use should largely depend on available resources. In Denmark we have a good supply of wind, and in 2015 42.1% of our power came from that source. During winter our days are short and often dark, so basing our electricity supply on solar wouldn’t make sense, but it does make sense as a supplement, especially during summer.

    Energy is also a social choice, and even in locations with a lot of sunshine, rooftop solar isn’t necessarily the best solution. More and more people live in cities, and I fail to see how their power needs can be met with rooftop solar. If solar is an individual solution, there will be individuals who can’t afford it. If persons with solar panels use the grid, of course they should contribute to the cost of maintaining it.

  19. #19 SteveP
    Southern New England
    January 15, 2016

    So I currently pay $19.25 per month for the privilege of being connected to the grid with my rooftop PV system. It doesn’t seem unreasonable. I hope to add battery storage in a few years at which point paying to be connected to the grid may take on a different feel, but it would probably still be a cheap form of insurance should my own generation system fail.

    There are a number of less easily quantifiable factors about solar power which haven’t been discussed yet.

    Creating a Conservation Habit- My overall electricity use has steadily diminished as I add more efficient devices, turn off parasitic devices, and hunt down wasteful habits. BTW, this is kind of fun ( see Entertainment Value). And it appears that there is no significant diminution of my enjoyment of material life as I use less and less electricity. Now, if my experience is in any way typical, this would mean that not only does the addition of PV to a home displace fossil fueled electricity, it can cause a conservation habit that further diminishes electricity use . If there were a cheap and convenient system to monitor usage, I would probably purchase it. Right now I can monitor my generation much easier than I can monitor my usage. And as Cosmic’s comment shows, currently, power companies don’t have much incentive to help people really learn to conserve, so home energy monitoring systems are not something they have encouraged. The outdoor meter does not encourage minute to minute analysis.

    Entertainment value- The geeky joy of charting my electricity generation and usage over the course of the year is hard to put a price tag on, and will probably not be appreciated by most of the public, but it is a factor.

    Educational Value – Let’s see, I’ve learned a lot of things like what my local insolation looks like day to day, month to month, season to season. I’ve learned that even right wing tea party types like to generate their own electricity. I now know what the whole PV process looks like and costs for a homeowner.

    Investment Value- If you had the choice of buying a house with a $20 per month electric bill vs. the same house with a $150 per month electric bill, which would you rather own?

    Societal Stability- Decentralization of power generation in a technological society may be useful in making that society less vulnerable to natural or man made assaults on the grid, especially as weather and political conditions drift further and further from those that were extant when the grid was initially designed.

  20. #20 Eric Lund
    January 15, 2016

    @skepticmac57: The system you propose is more or less what is actually in place where I live. There is a monthly customer charge (about $12, which is less than a third of what they are talking about in Nevada) and a charge for net electricity usage. The latter can be negative in summer months for customers with PV units installed, and if it is more than the monthly customer charge, the credit can be carried over.

    I’m in a part of the country that isn’t exactly known for abundant sunshine. Nevertheless, rooftop PV is a better deal around here than it seems to be in the much sunnier state of Nevada. It’s also mostly semirural, with typical house lot sizes much larger than what you would find in Las Vegas or Reno, plus we have trees which grow large enough that they have to be trimmed back every once in a while, so our local power grid should be more expensive (per capita) to maintain. The only way $40 a month comes close to making sense is if they are subsidizing ranchers who live in the middle of nowhere.

  21. #21 John Mashey
    January 15, 2016

    Thanks to all for examples … because:
    a) Policies matter

    b) And they are not all the same, because the natural energy mixes differ strongly by existing installed base and geography (which is why Mark Jacobson’s proposals are done by state, and country, but there is even more local variation,)

  22. #22 Miguelito
    January 15, 2016

    Why should solar-panel owners get retail prices for the electricity they push back onto the grid? It’s then the job of the utility to sell that electricity to somebody else for retail price, meaning the utility has to swallow a loss because they also have to pay to transport it.

    Wholesale would be far more appropriate, because then the utility can either sell it directly to somebody else or to a marketer who’ll do that themselves. Whether that’s 30% of retail or not I don’t know.

  23. #23 Andy Lee Robinson
    January 16, 2016

    I see the inevitable future of the grid as a democratic internet of electrons with producers and consumers – the power companies will take a role similar ISPs, facilitating distribution and managing infrastructure.
    They understandably might not be happy about this if it threatens their profits, but they are fighting the inevitable.

    Another bugbear of mine – it would eventually save money if they could upgrade to 220V and bury cables as in Europe, instead of leaving them dangling in midair, vulnerable to weather, trees squirrels and idiots with carbon fishing rods…

    Doubling voltage to the home would halve the current required, reduce losses, reduce fire risk and halve copper requirements.

    I don’t know if there are some places in the US where this has already happened, but seems like a good idea.
    Many appliances are already dual voltage and use autosense.

  24. #24 Greg Laden
    January 16, 2016

    Miguelito, no reason that people who sell electricity shouldn’t sell it as some sort of wholesale rate, except this one: We need, very much, to keep the Carbon in the ground. Being able to sell your Freedom Volts at a good price is an incentive. We need those incentives. Consider it similar to subsidizing the petroleum industry, but cheaper, and with better results.

  25. #25 Greg Laden
    January 16, 2016

    Also, as Andy implies, power companies are not supposed to be free market business entities. Things tend to go bad when they serve themselves as corporations rather than THE PEOPLE.

  26. #26 Brainstorms
    January 16, 2016

    it would eventually save money if they [U.S. utilities] could upgrade to 220V

    I’m not sure what the percentage is, but I think most residential and essentially all business/industrial installations in the U.S. are already wired with two phases of our polyphase (Tesla/Westinghouse) power system (with larger industrial sites having 3 phases).

    The “standard” residential two-phase service entry provides 220V — and is how appliances such as electric ranges & electric clothes dryers are powered.

    There is nothing that prevents a homeowner from adding 220V outlets anywhere in their home to power Euro/Australian 220V devices…

  27. #27 Christopher Winter
    January 18, 2016

    Art (#8): There is also the matter of safety. Long ago, before solar and other complicated electrical systems that can back-feed, the linemen could disconnect the lines on the utility side of an area and work it all knowing it was all safely disconnected. They could work fast and efficiently.

    With solar power being installed at spots the POCO doesn’t know about, and each installation potentially feeding power back up the drop, and coming out as 4160 or 7200 volts because transformers work both ways, linemen are much less able to predict what might be live of dead. Linemen are forced to work everything as if it is live because you just never know any more.

    Rigging grounds, using hot-sticks, working in heavy gloves and sleeves, and working at the measured and methodical pace consistent with dealing with things that can kill you slows everything down. Productivity suffers. Costs rise. Reality raises its ugly head.

    It’s hard to see how a single house could hold up the grid of an entire neighborhood if the mains power went out. Far more likely is that the house supply would trip off.

    Still, this is an excellent point. A live feeder from a house could be a danger to people working on the lines. I’d like to think it’s one of the things the proverbial “smart grid” would be designed around. That is, it should sense and indicate when the feeder from any house is live while the mains are dead.

  28. #28 Russell
    January 18, 2016

    I for one welcome Greg to the ranks of sensible Republicans or Libertarians who are in it for the FREEDOM, the financial savings, and also, just because it is cool to make your own energy, and trust he will be the first to petiton our next President for the right to buy a cold war surplus Russian Akula submarine to bring the benefits of nuclear privaitization to the benighted masses of Nevada.

    Godspeed to his EPA application for a Smart Grid permit to put it in his swimming pool

  29. #29 Brainstorms
    January 18, 2016

    Or Greg could simply join the ranks of those lobbying to do nothing about AGW, and rising sea levels will give him the FREEDOM to sail that Akula sub directly to his swimming pool. (Which will by then have become a salt water swimming pool…)

    Godspeed rescuing his drowning neighbors in time.. using that sub.

  30. #30 Russell
    January 19, 2016

    Chill, Brainstorms- by the time the EPA finishes the paperwork, the Akula will have evolved into a tetrapo, and crawled up Interstate 15.

  31. #31 Brainstorms
    January 19, 2016

    Hey, that might make the crawl up the Cajon Pass more palatable.

    Maybe there is a bright side to drowning our coastal cities…

    (I do prefer mountains to beaches, but this way we’ll get the best of both worlds — in the same places.)

  32. #32 zebra
    January 20, 2016

    Greg #25,

    OK, you’re going to get zebra’s standard lecture on “free markets”, and I don’t want you to take offense– the majority of people I read on comment threads have succumbed to the right-wing brainwashing and double-speak machine.

    A private company that only keeps the wires up and the system balanced is perfectly fine as a profit-making business entity. The problem is when it becomes a vertically integrated monopoly or closely linked retailer by generating electricity itself or “buying” it in an anti-competitive manner.

    Because the grid is a natural monopoly, these companies need to be regulated the same way shipping companies are– as others have suggested, they should have non-discriminatory rate structures and only facilitate the exchange between buyers and sellers. That’s whether the seller is a nuclear plant or a homeowner with rooftop panels. That way, you can have a free market (a real free market, not the Fox News version) in electricity generation, which is the best way to optimize the allocation of resources.

    One important simple point, although the advantages to such a paradigm are many. If you put a price on CO2 production, but allow utility monopolies to persist, they can simply pass on the costs to customers. Then, depending on the degree of regulatory capture, you have a long slog to get the disincentive to really take hold.


    1. “Free market” means roughly equivalent market power for buyers and sellers, not “free of government regulation so you can create monopolies and cheat the customer”. Buyers and sellers are “free” to make rational choices based on their perceived self-interest.

    2. UPS, FedEx, trucking companies, and so on, provide good service and make a good profit. No reason grid operators can’t do the same on the same terms.

  33. #33 Brainstorms
    January 20, 2016

    [Utilities] … can simply pass on the costs to customers. Then, … you have a long slog to get the disincentive to really take hold.

    It’s remarkable, then, to learn that customers have no reaction to having the price of goods and services change.

    I.e., if the cost of power rises, customers will not react to that (?) by reducing their demand (via reducing usage or increasing efficiency).

    Really? That goes against everything I’ve ever read about what ‘customers’ have been doing for centuries.

    I’m still waiting for a cogent argument against adding the “true costs” for CO2 disposal to the goods & services that include such.

  34. #34 zebra
    January 20, 2016


    Trying to pick a fight for no reason is not helpful. I didn’t say there shouldn’t be a price on CO2; I’ve argued for that multiple times here. I am saying that it will be far more effective if there is actual consumer choice among competing generation types.

    But yes, there is in fact a range of pricing that has little to no effect on consumption– petrol has to get into the $4(?) range in the US before there is significant impact on driving habits and auto choices.

    And reducing consumption has to be part of that free market mix of options, which will not happen, again, if you allow anti-competitive market manipulation.

    Think a little before your next knee-jerk.

  35. #35 Brainstorms
    January 20, 2016

    No one is disputing the idea of consumer choices, nor is anyone trying to pick a fight. Think a little before your own knee-jerk. Your #32 did show dismissal of the idea of pricing CO2 emissions, and for the reasons I countered with.

    Now you’re implying that consumer choice should be the focus, not proper pricing. Consumer choice does not rule out raising prices towards their “true costs” by factoring in the costs of producing & disposing of pollutants.

    If $4/gallon is required to significantly change the consumption of gasoline in the U.S., then tariff/tax petroleum by the barrel until it’s $4/gallon. Along with reducing consumption (through less use/purchases of more efficient vehicles), that will greatly help in paying for development of alternatives. No one will go broke at $4/gallon. (If that were true, then that has happened already when gas was over $4… No, it didn’t happen.)

    Doing such things is not “anti-competitive market manipulation”, it’s forcing the consumers to stop passing on some of the costs of their consumption to future generations (and to the detriment of the globe as well). That must stop, as failure to do so is an actual market manipulation itself: Encouraging consumption that would otherwise not occur by artificially lowering prices by gouging someone else (in the future). Worse, the “penalties & interest” are very steep and would be viewed as “not worth it” if the consumers were made aware & responsible.

    For all your free market lecturing, you seem to be missing an important element to making markets truly free and on a level playing field. Robbing someone next year to subsidize one’s own consumption this year is hardly “free” — by any pet economic theory.

  36. #36 zebra
    January 21, 2016

    John Mashey #14,

    Although I think you are overly optimistic about “the utilities” being able to change course, the issue of State control (and regulatory capture) is as you say the key. However, if we had a legitimate SCOTUS, wouldn’t the interstate commerce argument work to institute the kinds of structures I suggest?

    Let the grid operator be the UPS for electricity, and let anyone who wants to participate in generation or consumption invest as they see fit. Some will win. Some will lose. But you get the best match of resource to end use, and it would not take that long. It would include efficiency, of course.

    The idea that a PUC should be there to provide for anything but the regulation of a natural monopoly– which transmission is but generation is not– is simply wrong and anti-competitive.

    So, yes, someone will exploit the market for charging EV and PIH, but that should be a generator.

  37. #37 cosmicomics
    January 26, 2016

    “Increasing the number of power stations is not enough to create a reliable source of electricity. The problem of intermittency remains.

    To resolve this, the model uses the variability of the weather as a strength, rather than a hindrance, by creating a single electrical power system across the US — a solution which the study says is cheaper than integrating energy storage…

    However, the larger the area, the more effective they can be at balancing the supply and demand of electricity. This is particularly true when it comes to integrating intermittent renewables into the grid.

    Having a larger area means that there is a larger volume of potential resources…

    The study connects up the whole of the US through a network of high-voltage direct-current (HVDC) transmission lines, which is capable of transporting electricity over long distances.”

    Future cost-competitive electricity systems and their impact on US CO2 emissions