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Supreme Court Rules In Favor of Energy Conservation Program (yahoo.com)
mdsolar sends news that the U.S. Supreme Court has issued a 6-2 ruling in favor of the Federal Energy Regulatory Commission's ability to create incentives for conserving energy and reducing demand on the power grid at peak times.
The demand response program pays large electricity customers like retailers, schools and office buildings to reduce energy consumption on hot summer days and other times of peak demand. The reduction in power use means electric utilities don't need to turn on backup power plants, which cost more to run and boost electricity prices. ... The rule won wide praise from environmental groups because it curbed the need for utilities to build expensive and air-polluting power plants. The demand response program saved customers in the mid-Atlantic region nearly $12 billion in 2013, according to PJM Interconnection, which manages the wholesale power supply for all or part of 13 states. ... But the rule has meant millions in lost profits for utilities. Those companies argued that the program impermissibly targets retail customers.
without some damn Republican scam making them uncomfortable.
There is more about the ruling here http://thinkprogress.org/clima...
By your definition, Adam Smith was a socialist.
Ever noticed that when these companies want to protected their interests they say something along the lines of how badly it will hurt someone else:
Press: So Mr PR guy, what is your companies reaction to having this highly profitable but damaging line of business made illegal?
PR guy: Oh we are fine with losing billions in revenue, we've always known it was an unfair monopoly. What we are concerned about is that this will cause millions of cute puppies to die. We don't understand why the government is so intent on killing millions of cute puppies.
My ism, it's full of beliefs.
Where does it apply and how our we being exploited?
But the rule has meant millions in lost profits for utilities. Those companies argued that the program impermissibly targets retail customers.
They should have argued that it was a "taking" and the government had to reimburse them for their losses.
The tail end of the Fifth Amendment reads:
and the Supremes have already ruled that new laws and regulations, and changes to existing ones, that suck part of the value out of property (in this case, the value of the power generation and transmission infrastructure, which is based on the profit it creates) constitute a "partial taking" and require the government to pay for what it took.
Getting the Supremes to recognize that a rule change which imposes a change in the flow of money from customers to the investors in a busines can constitute a fifth amendment taking of the value of the latter's investment would inhibit arbitrary economic winner-picking regulations and move the US economy away from Fascism (alias "crony capitalism) and toward (free-market) Capitalism.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Justice Alito recused himself. Makes the point that stock ownership is political. Harvard President should take note and divest from fossil fuels. This is especially acute owing to Harvard taking up an Academic Honor code. http://slashdot.org/journal/25...
You do need some price regulations on basic industries. If my neighbor has trouble affording enough electricity, water and phone for basic things (necessary heating, clean water to maintain health, ability to apply for and maintain a job) then it can reduce overall economic production and, indirectly, hurt me personally. Increasing baseline well-being for the country, especially when it has relatively little cost, is absolutely good for economic growth...even when it limits utilities' profits. Sorry not sorry.
Federal government can regulate interstate commerce. Since these transmission lines send power across state lines that would give them the power to regulate it. You must have missed that part in school where you showed up.
There is already location based inequality on real estate, and the system is working great in reducing demand in the high-demand regions. Yes, of course, some things need to be regulated, like requiring water coming out of the tap to be clean, or where monopolies are too easily abused, e.g. with violating net neutrality or with walled-garden apps/services/operating systems/office suites, but requiring energy producers to not turn on the plants they own and have paid for? They do it probably because an energy plant can't be moved to india, and the state can do everything to them it wants.
Governor Brian Sandavol has sold out the people.
He still votes in favor of Warren Buffet's NV Enegy, and not liberty for the people.
And wondered whether it is in people's interest to face electricity tariffs that may vary widely (by a factor of 10 at least, and without warning, like on a stock exchange) between the 15-min time slots in which electric power tends to be bought and sold?
Because that's what would be needed to remove one of the biggest imperfections in the electricity market: fixed consumer tariffs.
Allowing regulatory bodies to incentivise reduced consumption when generation costs go up is actually the simplest, most pragmatic way to remove some of the imperfections from the market. And it *demonstrably* results in quite substantial savings for customers.
Only ... it tends to cost power companies money, which is why they opposed this commonsense measure by legal means, and lost even when they tried to dress up their self-serving objections as "opposition to measures that interfere with the free-market".
Funny how this kind of dogwhistle tactics always brings the more dogmatic "free market" supporters out of the woodwork. Supporters who are clueless about anything to do with the issue at hand (including the market in which the issue arose), but but who are consistently full of empty slogans and over-simplistic arguments.
Those companies argued that the program impermissibly targets retail customers.
I have to at least partially agree with that argument - Why the hell can't I cash in this, since my home demand curve almost exactly reverses the grid demand curve?
Because the free market does not work. You are a captive buyer of energy utilities, you have not ability to pick and choose who you buy electricity from. The utilities in turn do not charge their customers solely on the amount of electricity used or cost of infrastructure. The utilities when left to their own devices have shown that they will discourage energy conservation as it cuts into their profits.
The commerce crosses state lines. Seriously, have you read the constitution yet or the court decisions that have come down over the centuries?
Because that's what would be needed to remove one of the biggest imperfections in the electricity market: fixed consumer tariffs.
Consumers have a demand for planability, and if they turn on the dishwasher it shouldn't cause a hundred dollar bill, while the next time they can heat their house with electricity and its still a few dollars, this isn't something a consumer wants. They want to stay warm all the time and get their dishes washed all the time. So there is no "imperfection" here, just a special kind of demand. The energy producers either offer tarriffs with fixed prices, or they can offer tariffs with added price variation but lower prices in total if used smartly. They can offer it, and as long as the alternative is still provided, and not everybody is required to use a "smart" tariff which includes a spyware "smart" electricity meter, I have no problem with this.
And, there is even a much bigger "imperfect" constant: The network frequency. The network is built so that if you turn on a light somewhere, somewhere else a plant has to do the additional work. The thing that would change/vary if demanded != provided energy is the network frequency. And due to multiple reasons, it is tried to be kept constant. As the consumers can basically turn on their devices whenever they want, the producers have to account for it. Multiple systems have been put in place in order to keep the frequency inside safe bounds, like the rotational momentum of the moving parts of the generators in the power plants (for the fast-response changes), or plants that stay ready and can be turned on within minutes if the demand raises.
None of these two things would level out "imperfect"nesses of the market, the market has already found fine solutions for both cases.
And it *demonstrably* results in quite substantial savings for customers.
So you care about the market, or about the customers?
If a proposed law is advertised as "Energy Conservation Program", then its clear that it isn't intended to level out market imperfections. Yes, externeralities exist for every market, but if you want to internalize the cost then you should clearly label it that way, and not give it some bolshevik slogan. Your goal should be to find the factors you want to internalize, not to conserve energy, whatever this means. Energy can't be "conserved" either way, its against the law of energy preservation.
Those republicans have used uncomfortable temperatures for years to keep kids from learning and to make life more difficult for teachers.
They think the free market is a magic bullet. Any market ever has had some interference somewhere so these nutcases can always fall back and claim a true free market could still theoretically work despite all the empirical evidence against it.
The problem to some is that they only look at profits alone. The "substantial savings to customers" is not a concept they want to accept, as they think customers can reduce costs merely by buying from someone else. The government has a vested interest in reducing energy usage despite the loss in profits to some companies, but free market believers don't like externalities because it screws up their naive models. Almost everybody in America gets only one choice of electricity provider, take it or leave it, there is no free market by its very nature. And those utilities will fight viciously against anything that brings in competition (like municipal utilities).
Electrical plants are very dangerous. Turning one on without proper preparations will be dangerous.
This is also why a plant will shut off if its transmission lines go down.
And before you ask, the state is the one that gave them the authority to run those lines, they did not negotiate with each and every property owner.
You are a captive buyer of energy utilities, you have not ability to pick and choose who you buy electricity from.
I don't know how its in the USA, but at least in the EU there are multiple markets: the network providers, the plant running companies, and the actual vendor company you buy the energy from. And EU regulation (called REMIT if you want to look it up) requires network providers to be separate from the plant running companies, so big providers don't abuse their advanced position. As customer, you have choice from multiple energy vendors, you are not captive.
If you live in deregulated parts of the USA, you do indeed have a choice of residential electric provider. Those providers (load serving entities) buy power from the generating companies facilitated by the spot markets, and the energy is delivered to you (with a fee) over the electric distribution companies. It is about the most fair way to have competition with monopolistic delivery system.
Your argument falls flat on it's face. Your neighbour could be a waste of space good for nothing shithead who chooses to not work and live off the dole.
In fact, it could turn out that if you DON'T provide him free electricity water and phone service, that he would then choose to work on his own, but since these services are provided, he chooses not to work.
In either of these cases the baseline of well-being for the country is worse under these freeloading policies.
Some people make good decisions, some people make bad decisions. You probably want to avoid subsidizing bad decisions if you're going with the utilitarian argument.
But hold on... Who cares about the utilitarian argument? If I can show that it's morally wrong for the government to bring a gun into the negotiation between every other party in the country (price fixing) then who cares about the utilitarian argument?
If I can show you that by killing homeless people, we're all better off in total, does that make it right? Of course not. Utilitarian arguments are pointless.
Price fixing is immoral. You can show this with just two principles:
It doesn't even take very complex thinking. If you want to see if something the government is doing is immoral, just imagine a neighbor you don't like is taking the same action. If you think it's wrong for your bad neighbor to force prices between other people to a certain level at the barrel of a gun, then it's wrong for the government to do it.
Utilitarian arguments don't help. 'But it's democracy and elected officials' doesn't make it right either.
If your elected officials said 'we're going to start our homeless extermination program for the good of the country' it's still immoral.
If you hold a direct ballot and a majority of the population votes to exterminate the homeless, it's still immoral.
Q.E.D.
Liberty.
There is some of this in the US but it is very rare. Where it exists it is mostly for customers who want to buy "green" energy. But it has to be supported by the local utilities (possibly due to regulation).
They are alwyas generating hot air to pump into schools.
Pure socialism is just more upfront about claiming that your stuff doesn't really belong to you.
Your key point was indirectly at the end. Pure anything is likely to be crap. Models generally make assumptions. If you accept those assumptions, both pure capitalism and pure socialism work great. The real world is more complicated and your likely going to need a blend of a lot of ideas, to make it all work well. You can't make blanket statements that all socialism is bad, since there are some countries with a fair amount of it rating extremely highly on the quality of life scale. You also make the ridiculous argument that socialism is about taking all the workers efforts. Yes, that would be a rather stupid policy.
The main thing that concerns me is we may have titled things too far, since some people actually seem to have more kids and such to get more benefits. Progressive taxes aren't really a problem, even fairly aggressive ones, since people always want more money, I.E. if you did 30% for under 1M and 70% for over, then a person who made 2M would still make 300k more than a person who made 1M. Also, since that amount of money is well above what is needed to simply get by, it can go to luxuries.
Perhaps we could put additional caps on things like the child tax credit and mortgage interest deduction to discourage abuse. I.E. perhaps the tax credit for the first child is full. The same for the second child, but after that it is 1/3, 1/4, etc.
Of course any subsidy to an industry needs to be reviewed and justified regularly, with the requirements only going up over time to keep it.
It is not that they think it is a magic bullet. It is that they know they can profit off the imperfect market. The imperfect market is usually one in which money perpetuates more money, and so if you have money and do not understand the concept that we all benefit when we all play fair, then you are prone to join the free market is a magic bullet bandwagon.
Doggy-matic
Socialism works about as well as overfertilizing a plant works. ...
Quack quack quack quack quack. Doubleplusgood no-think duckspeak.
Moochers mooch, regardless of the system and they've never run out of money yet.
Myself, it occurred the other day that if I had a guaranteed income I'd be free to invest in some of the schemes I've heard of lately that seemed worthwhile but not so certain that I could afford to up and quit my job in the hopes that it would pay off before I starved for lack of interim income.
The US Supreme Court, USSC, also known as the Supremes, settles in favor of another Bureaucracy, the Federal Energy Regulatory Commission!
Ha ha
When the "chips are down" and the "sperm is a'spertin" the USSC favors the Penis.
A no brainer in the Stock Market world old boy.
Ha ha
One of the reasons schools aren't year round here is because AC is quite expensive to run during the Summer months when it's 105f outside :|
So to save money, they shut off the AC during those months. They save all sorts of $ on electricity, but the heat coupled with the humidity makes a perfect breeding ground for mold.
Is why the school smells so lovely when it starts back up. The cleaning staff has barely had time to bleach everything and wipe it down before everyone comes back.
Want to see some serious shit ? Call OSHA out to inspect a school about a month before it reopens. It's unlikely it will open at all once they've done their thing.
> Initiation of force is immoral
Bad assumption doesn't lead to a compelling application.
If you hold a direct ballot and a majority of the population votes to exterminate the homeless, it's still immoral.
Not at all. It's a vote, holding a vote is entirely moral.
Acting on it, that's another story.
Some US states have retail energy markets, where they can shop for the energy portion of their bill. The transmission and distribution is through the utility. What is cropping up more and more are companies seeking regulatory bailouts for generation plants even in markets where they receive capacity payments.
Scalia and Thomas dissenting; go figure.
Demand response does not force a generator to not run. Instead it is the realtime price posted by the ISO. If a generators cost is $150/mw to run and the ISO is offering $100, the gen won't run.
Demand response just let's retailers/schools/industrial users cut back their usage when prices are through the roof. There is a very robust capacity auction and day ahead market that most generators take advantage of to ensure payment even if they do not run. For those units that do not participate they are competing against demand response and $2 natural gas. This is free market capitalism at its best IMO. (Disclaimer I trade electricity futures for a living)
If saving money was not incentive enough, giving money will not help. Kind of ironic, by government entities using less power, it saves tax payers money, by rewarding them for using less power, it will cost tax payer money. In the end the tax payer is most likely losing money in the deal.
Politicians got to buy those votes though.
a) You have 1 set of power lines running into your house. You can't be a customer of some other power grid, and you can't do business with anyone who is not physically or virtually connected.
b) Electrons are fungible. You can't distinguish the product of one provider form another. The output of different suppliers gets all mixed together, but there is no way to sort it back out at the other end.
That in no way meets the conditions of a free market.
No, you don't need _federal_ regulation of electricity. There's no compelling reason for it over state regulation.
This "Free Market" we have in Europe have to some extent changed the map so now the fixed costs are higher while the usage cost is lower than how it was some decades ago. Of course the change isn't consistent and may vary by country.
Maintaining the electrical grid and improving it is a continuous work. Customer satisfaction is important, and adaptation to new technology likewise to stay competitive.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Be wary of that word Republican, it may not mean the same thing everywhere. Here it's an anti-monarchy movement.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
There is some of this in the US but it is very rare. Where it exists it is mostly for customers who want to buy "green" energy. But it has to be supported by the local utilities (possibly due to regulation).
Supply is de-regulated in Illinois - you are free to choose from many energy suppliers (and if you haven't looked into it, you should - it was running 20% cheaper per kilowatt than ComEd last I checked), and its definitely not all green, though there are many options. I'm sure there are at least a few other states where this is true.
Check out the illinois electricity supplier offerings here: http://www.pluginillinois.org/OffersBegin.aspx
Some US states have retail energy markets, where they can shop for the energy portion of their bill. The transmission and distribution is through the utility. What is cropping up more and more are companies seeking regulatory bailouts for generation plants even in markets where they receive capacity payments.
I live in NY which has a deregulated market. Out of curiosity I just checked the rates of every ESCO provider and out of 35+ only a handful had better rates than the distribution company for either regular or green energy, variable or long term. I suspected as much because despite being on the NO call registry I regularly get calls from ESCO salespeople which never identify whom they are working for or provide information on pricing or terms, instead they make it sound as they are from the distribution company and are informing me I could be saving money if I sign up for a program. I have had even a few of them show up at my door asking to look at my bill so they could get the account number.
Certainly makes the case for people being able to generate their own power with a choice of utilities as a back up.
"The hands that help are better far than lips that pray." - Robert Ingersoll (1833-1899)
Because every state's electrical grid has no effect on other states, right? There is no way one state's lax regulations could take down the grid of a neighboring state. Also unicorns fly out of my ass.
It helps if you realize that society holds all the cards. Utilities are classed as essential services and society makes the rules. Companies can agree to follow those rules and make some profit at the same time, or they can go do something else. We are going to make the rules benefit us, and any profit we allow is merely an incentive to provide good service.
Unfortunately in some places people forgot that and the utility companies took over, but the reality is that if our democracies work properly we can fix the rules.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
There's a concept called "decoupling" - where a utility's profit is not based on the amount of power sold, but on other factors. (Say, reliability, low cost, customer satisfaction, etc). Many utilities do this, via their local regulating body of government.
With that in place, the utility doesn't care how much (or little) power you use - at least on a profit level. If the government offers a bonus to the utility for successfully implementing "green" power or a Demand Response system, then there's a lot of incentive for the utility to make that happen.
This isn't rocket surgery. Utilities are just like any other company. So many people have already decided that utilities are evil that they can't see how a small change to the rules can be good for everyone.
You can only buy from one energy supplier at a time, though. You can't say, "nPower has a great night-time rate so I'll buy electricity from them between the hours of 10pm and 6am, but Scottish Power is cheaper the rest of the time so I'll get the rest from them."
It makes the case, but that is hardly an overwhelming counter-argument. Huge numbers of electricity customers, possibly even a majority, cannot avail themselves to this. For instance: renters cannot typically put solar panels on the roof of their landlord's structure; the electrical demand for a large building is much larger than the available renewables can provide. The capital costs of self-generation - such as diesel generators or natural gas fuel cells - is quite high, and most folks simply are not cut out to manage that kind of machinery.
It's an option for some - and an increasing number of folks are availing themselves to it. This ought to be a concern for utilities generally, and for anyone who utilizes the grid (and pays for it) in any fashion.
Don't forget that the grid operators and massive energy companies want to limit your ability to make it financially work anyway. They jack the prices up as high as government regulation will allow, which causes increasing numbers of customers to switch to on-premises generation (solar, etc.), and then they whine to the PUC about how the rest of the ratepayers are picking up their bill for still being tied to the grid, even though the guy who just got panels on his roof is paying a PUC-mandated grid-tie fee. They oppose net metering at every chance. They spend loads of money lobbying politicians to put in place nonsense laws to prevent people from being able to save money and reduce environmental damage at the same time. See: Nevada.
They do everything they can to make it so the 'free market' doesn't work for anyone but them, by making it anything but free. And they have the resources to convince the useful idiots out there that it's a good thing, so that they will continue making an unprecedented amount of noise.
If the free market is all that, why are these grid operators so afraid of it being allowed to function? If the grid-tie fee isn't sufficient to maintain the grid, why aren't you lobbying the local PUC to raise that, rather than employing anti-competitive tactics in order to continue siphoning money from everyone's wallets at the highest possible speed?
Below this post: grousing about solar subsidy, etc. Never mind all the fossil subsidy out there for the last 100 years, we'll just hand-wave that away because it all of a sudden doesn't count. Never mind the biggest externalized cost of fossil energy: not having to deal with what blows out the stack into the air we all breathe, and the tens of thousands of respiratory ailments / deaths it causes every year. And all that is without even touching anything in the same time zone as climate change.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
I'm hugely in favor of free markets, but I feel compelled to point out that even with these rules, it's still a free market. Changing incentives doesn't make a market not free. The incentives distort the market, but that's not necessarily a bad thing. Intervening in markets should not be done on a whim, but in some cases it is the best option.
Examine even your most deeply held beliefs. Nobody is always right.
Interference does not necessarily prevent a market from being free. It distorts the markets, but free market != totally unregulated market. Price controls would make a market not free, but incentives (based on changing the flow of money to/from government) are different.
Examine even your most deeply held beliefs. Nobody is always right.
You say
Because the free market does not work. You are a captive buyer of energy utilities
but that's not a free market. You can't say "free market doesn't work" and use an example that's not a free market to support your argument.
Examine even your most deeply held beliefs. Nobody is always right.
In practice, decoupling means that the power company charges you whatever they want, and they will use that economic leverage to penalize you for being efficient in your use of power. You used 10% less kwh last month by investing in LED bulbs? So sorry, we're going to have to charge you more on your bill, and you can't stop us!
They gain the ability to do this from strategic "campaign contributions" and "charity donations".
That is the reality of decoupling. When power company employees discuss it, it's horrifying - the bosses literally rub their hands in glee at the idea that they can charge customers whatever the corrupt local politicians will permit, regardless of the value of any goods and services the customer receives. It's a truly extreme moral hazard. Don't let it happen in your state.
I wonder why they don't already do that?
Because the technology (smart meters) for on-demand pricing is not yet widely available. Even when smart meters are available, many people opt-out of on-demand pricing.
My electric company installed a smart meter at my house last year. Since my wife has an electric car, we immediately opted-in for demand based pricing, and programmed the car to charge at 2am. We also have a smart switch on our AC compressor that will shut if off if power demand is peaking. I figure that we save about $30 / month, and the power company saves money as well.
Depends on the plant, coal/nuclear plants (used for base load) are very tricky to spool up/down. However we don't really build those anymore. I think the plants these companies are complaining about are their nice new natural gas turbine plants which are being built like crazy, constructed (relatively) cheaply and can be turned on/off like a light switch (again relatively). As for the power lines that is a mixed bag as well, yes when the lines are running along roads they like most utilities (phone, gas, etc) do get to run their lines basically free of charge, however utilities also purchase large swaths of ROWs over private land out of their "own" pockets (probably written off on taxes or something).
You can say that a truly free market doesn't work because it is impossible or at least infeasible to achieve. There are fundamental obstacles that prevent a free market from being possible here:
So the closest you can realistically achieve is a highly regulated distribution grid and a free market of energy sellers on those wires. Of course, that often leads to the tragedy of the commons, where none of those energy sellers are responsible for the wires, and so none of them have any incentive to pay for repairs and improvements, and all of them fight any attempts by the grid providers to raise rates to cover those costs unless they are given no choice in the matter. This is basically what we have in many places, and there's still no evidence of competition driving rates down. In fact, rates are higher than ever.
The places with the lowest rates are usually places where the governments have started nonprofits like TVA to handle energy production. By taking the profit motive out of the equation entirely, the motivation to raise prices beyond what is needed to handle repairs and improvements goes away, and you get the cheapest energy you can get. For essential services like power, water, etc., nonprofits are inherently a better alternative to any form of competition, because they will almost invariably produce the best service at the lowest cost with the lowest overhead.
Check out my sci-fi/humor trilogy at PatriotsBooks.
The places with the lowest rates are usually places where the governments have started nonprofits like TVA to handle energy production.
Do you have a citation for that? I don't agree with nonprofits being *inherently* better. In some cases, they may be, but it really depends on the management.
Examine even your most deeply held beliefs. Nobody is always right.
> Allowing regulatory bodies to incentivise reduced consumption when generation costs go up is actually the simplest, most pragmatic way to remove some of the imperfections from the market.
I'm trying to figure out how increased retail costs during peak load periods, which pretty much every utility does, public and private, doesn't incentivise (sic) reduced consumption.
Just take a look at TVA rates (which are some of the lowest anywhere in the U.S.) and compare them with rates in states with deregulated power markets (e.g. California). My parents are paying a flat rate of about 8.75 cents per kWh in TN. Here in the Bay Area, the Tier 1 rate (charged on your first trickle of power) is a whopping 18.2 cents per kWh. The top tier is 34.9 cents per kWh. So it costs 2-4 times as much.
Now granted, not all power production is equal, but even the most expensive power (solar and offshore wind) costs only about three cents per kWh to actually produce; most power costs more like 0.5-1.5 cents per kWh. The rest of that 8.75 cents is going into grid maintenance, planned upgrades, and construction of a new nuclear plant. Even if we assume that all of the costs in California are double what they are in TN (which is likely to be a gross overestimate), that doesn't even justify an 18.2 cent flat rate, much less an 18.2 cent subsidized rate with rates that go into the stratosphere after your first few kWh.
The big difference, of course, is that in TN, the power companies are typically nonprofit municipal power companies that serve a single community, and buy most of their power from TVA, which is also a nonprofit. By contrast, PG&E is a decoupled power broker whose profits are assured whether they sell any actual power or not, which gives them no real incentive to keep prices down. And the power plants that produce the power are all for-profit companies, who have every incentive to keep prices high. It's just about the biggest train wreck you could possibly come up with.
Check out my sci-fi/humor trilogy at PatriotsBooks.
I think another big difference you're overlooking is the fact that the TVA received a lot of initial funding to build facilities, whereas many other places did not. TN also has a much smaller and easier to manage grid than CA does. I think costs for labor would likely be at least double that of TN, especially in the Bay Area.
In addition, how heavily are the electricity providers taxed in each setting? I believe the TVA doesn't pay corporate taxes, as it's a non-profit. For-profit companies have incentives to keep the end price high, but not the cost to produce. They do still want to be efficient - no sense wasting money if you can avoid it.
Your argument seems plausible, but I'd prefer to see an actual study before I'd be convinced. Still, you did manage to make me think more about it, so this is already a good discussion.
Examine even your most deeply held beliefs. Nobody is always right.
They got a lot of initial funding to build the first facilities... almost a century ago. Since then, it has been an autonomous organization to the best of my understanding. After 83 years, any power generation system would have paid off its initial infrastructure costs, so that difference isn't likely to still have a meaningful effect on today's power rates.
Also, yeah, the grid is smaller, but I'm not sure about the easier to manage part. Tennessee's power grid is mostly above ground, much like California's grid, but unlike California, large parts of the state get hit by ice storms at least once or twice a year. You can safely assume that there will be a multi-hour blackout at least once a year during the storms, and there have been times when power has been out in some neighborhoods for the better part of a week, simply because it took that long to get all the lines repaired. A truly big storm in any southern state usually results in them bringing in people from at least five or six states to get things back up and running in under a week. California just doesn't have anything that compares with a typical icepocalypse....
Also, West TN (at least) has a regular tornado season that does tremendous damage. Case in point, my parents are having to have substantial repairs after their next-door neighbors' huge trampoline (very heavy, very well secured) with three-inch steel pipes went airborne, shattering bricks all the way up on the second floor, smashing shutters, flattening a gutter, bouncing off the house, and taking a chunk out of their holly tree before ending up in their front yard, and that was just a single straight-line wind gust, some thirty miles from the nearest tornado. Thirty-year-old pine trees were lying down on their sides nearby. Their full-size garbage can blew through the air, knocked over a pile of bricks, and then dented the side of their car. And this was a good year storm-wise. The worst year took the roof off the university in Jackson where my mother taught, knocked down all the dormitories with students inside (miraculously with no deaths), tossed pickup trucks against the buildings, and carried the university's sign almost forty miles before dropping it in a field somewhere near Huntingdon (or maybe McKenzie, I forget which).
If you've never seen high tension wires swinging through the air and creating huge arcs as they smack against one another in high winds, you've probably never seen a storm in Tennessee. So I can't imagine that the infrastructure is really easier to manage than California, unless you limit the discussion to the 350 days out of the year when 200-pound trampolines aren't flying through the air at 70 MPH.... :-)
Now to be fair, California does have more earthquakes than Tennessee (by probably a factor of three or four). Of course, Tennessee's largest quakes were so big that the Mississippi river flowed backwards and created a rather sizable lake. They caused the Liberty Bell to ring all the way in Philadelphia, and were felt all the way up in Quebec. So... let's call it a wash.
Depends on what you mean by corporate taxes. Corporations pay five kinds of tax (that I'm aware of, anyway), depending on location:
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Let me correct that. Tennessee does have what they call an excise tax for businesses, which is what California calls a franchise tax. My bad. They have no personal income tax. So their nonprofit status saves them a few percent.
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About 80 years ago, sure, but that's still a pretty big gift, and one that would let them spend more a) initially on setting up the grid and b) spend more on upgrades over time, as they don't have to pay loans back. The original money isn't relevant to rates now, but it may be relevant in how it shaped the grid's formation.
Those are all pretty good points. I do think CA's infrastructure would be harder to maintain still - they certainly don't have ice storms, but as you said, there are earthquakes. It may also be more expensive to get permission to run lines in CA (whether that's through buying rights to put lines up or lobbying politicians to use eminent domain).
I think property taxes are more important than you're giving them credit for - they're often the largest tax people pay, as CA's rates (and property) are much higher than TN's - TN also only applies their tax rate to 25% of the property's assessed value.
There's also state regulatory costs to take into account - I don't know how I'd go about finding those, but I would have a hard time believing CA has less stringent regulations. How much that affects the price of electricity, I don't know.
Ultimately, I think the TVA does good work, but I'm not sure a TN/CA comparison is the best, since there are a lot of other differences between the two states. I'm certainly willing to admit that in some cases, non-profit power companies are better, but at this point I'm not going to say they're inherently better.
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