And once again fucked incentives are at risk of screwing us over. In fact the article notes exactly that two-thirds down:
> To be clear: For both economic and environmental reasons, it is good that US power demand has decoupled from GDP growth. As long as we’re getting the energy services we need, we want overall demand to decline. It saves money, reduces pollution, and avoids the need for expensive infrastructure.
> But the way we’ve set up utilities, they must fight that trend. Every time they are forced to invest in energy efficiency or make some allowance for distributed generation (and they must always be forced), demand for their product declines, and with it their justification to make new investments.
> Only when the utility model fundamentally changes — when utilities begin to see themselves primarily as architects and managers of high-efficiency, low-emissions, multidirectional electricity systems rather than just investors in infrastructure growth — can utilities turn in earnest to the kind planning they need to be doing.
edit: replaced expectations by incentives which is what I meant
That's a bizarre gripe. Everywhere I live, utility companies beg subscribers to use less power, because they want to keep output within the hard limit of their current (ha!) capital outlay, in the face of population growth.
When the drought was at its worst here in CA, there was a concern that LADWP would have to jack up their rates because people were doing such a good job conserving water. They have lots of fixed costs (salaries, pensions, infrastructure improvements) but their incoming $ is tied pretty tightly to consumption
My water bill is always something like $50 for various "service fees" and surcharges, and $30 for water. EBMUD even charged me $36 to set up an online account with them, so I could have the privilege of using autopay.
When I moved to LA in 1990, we were in a drought and DWP did raise it's rates to both accommodate for and encourage lower usage. After the drought though, oddly enough they didn't go back down...
My local water district here in NorCal raised it's rates 2 years ago during the height of the last drought as well...
Don't know about US or the developed countries, but these times are a boon for the African nations, India and several others. Energy-efficient electricals alongwith improved Solar facilities are going to have a significant impact on the economy for these countries. It's still gonna take years, but I can't wait to see the world getting over the oil/coal economy!
The biggest problem isn't really lowering overall consumption but lowering peak consumption. There's typically enough capacity during the night, but not on summer afternoons. Some power companies will pay you to install a device to cut off your AC for ~15 minutes during peaks (controlled by them, of course).
Nest has a program that gives the power company a small amount of control, in return for which you get a bill credit (and a free or discounted Nest).
And, of course, there's peak pricing, which is more what you're suggesting. But power companies are a regulated monopoly, so there are typically restrictions on how much they can increase the price. If they can lower peak consumption within their regulated prices, they can defer on infrastructure investments and thus save money.
Paying to turn people's A/C off for 15 min is more efficient than having a bank of generators used for 15 min, 2 days a year. If it works, it's much preferable.
We'll see about getting screwed. It seems to me the most effective way to get households to use a lot more electricity is to encourage them to get electrical/plugin hybrid cars.
TVA has essentially made home solar financially untenable in the areas they serve. If you want to use grid tie solar, you must sell all the electricity you generate to TVA at wholesale cost and buy it back at retail.
And that just encourages development of an automatic switching system such that power generated on site is always used on site. It never goes out to the grid until after 100% of local demand is met, and all local storage devices are topped up.
And that, in turn, would encourage those customers to just go completely independent from the grid and either find some other flexible use for excess power or shut down excess production.
Pretending that local power is using grid infrastructure does not make it so. People can and will disconnect from the grid to disprove that lie.
I'm surprised this area of smart switches aren't more available or popular.
I've done a small amount of research because I could not find a smart charge controller with AC inputs and I was considering making one with a Raspberry pi.
> People can and will disconnect from the grid to disprove that lie.
More and more municipalities are making this illegal. To protect their utilities, they require that you tie to the grid and sell all electricity you generate to the grid and then buy it back for more.
Can confirm...when I was living in AZ the main argument against net metering is that the Utility company would suffer...nevermind the fact that solar users would benefit, the state legislators and ACC (Arizona Corporation Commission) always sides with the utility company.
Well.... they've made grid-tie solar untenable, but off-grid solar is becoming more viable with products like the Tesla Powerwall. Costs aren't low enough to make it financially viable for most people, but for new construction that faces high costs to run utility power, it can already be cheaper.
By discouraging grid-tie solar, utilities may be shooting themselves in the foot as off-grid becomes more affordable.
Assuming a normal electric consumption, an off grid solar system costs $30-40k more than grid tied. Furthermore, the batteries won't last forever. (That's assuming electric cars, heat pump, basically an all electric household.)
To be clear, the law is such that you can't use any of the electricity you generate while it's still "yours." You have to first sell it to TVA (and get paid X) and then buy it back from TVA (and pay X+Y.) In other words, you have to pay $Y to use your own electricity.
That's not what the linked article says. The linked articles says that if you want to feed the grid, you're only going to get wholesale prices, while having to pay retail for the energy you consume from the grid. It's a rule of accounting.
If you don't want to eat the premium, don't feed the grid.
That is, consume your electricity before it ever hits the meter(s). Presumably the real issue is that typical consumer systems aren't designed to function the way you'd want to avoid the TVA accounting rules.
If you are generating 5kw and using 4kw only 1kw gets sent to the grid. So you are not selling those 4kw at wholesale prices and buying it back at retail. Only the power that is time shifted gets this treatment.
You are free to buy batteries to do your own shifting. Also remember that wholesale costs typically just account for power generation, while retail costs also account for grid maintenance. An owner with solar is benefiting from grid maintenance, so it makes sense that they contribute.
Now from a societal perspective you may want to subsidize solar. But it certainly isn't "unfair" to buy power at wholesale and sell it at retail.
Unfortunately this is not the case! TVA has a "sell all buy all" rule, that if you are connected to the grid and generate 5kw, you are required to sell all of those 5kw to the grid (at wholesale price). Then you buy back the 4kw you use (at retail price). It doesn't matter if you were only using your own generated power, you still pay. Crazy! I didn't believe it the first time I read it either, but that is really the law they adopted.
All the rule does is prohibit net metering. If you never sell your power on the grid it's irrelevant. So you're free to use your 4kw directly.
Presumably this is a hassle because most equipment is designed for net metering where the system is setup to feed all generated capacity to the grid and consume all energy directly from the grid. So without net-metered billing, to avoid paying the retail premium you'd probably need a very expensive system that eliminates the cost effectiveness.
In fairness, AFAIU most utilities despise net metering. From their perspective they're the ones getting screwed, and the TVA billing system more fairly compensates them for infrastructure costs.
Even crazier. In France, the setup is similar: you sell all your energy to EDF, and they sell it back to you. I don't know if that's still the case, but a few years ago, the KWh you pay to them was cheaper than the KWh you sell.
If the selling and the buying happens at different times, then that doesn't seem so crazy. The real cost of electricity is dependent on supply and demand - which varies with time.
In certain parts of USA demand is especially high when the sun is at it's peak and most places on earth see low demand in the middle of the night.
According to the link sent by eppp TVA doesn’t allow net metering.
Edit: I got the terminology wrong. I agree that expecting net metering (“free” time-shifting) is not reasonable. And it seems that in addition to the “sell all, buy all” solution it is also possible to sell (or buy) only what remains after (or is required for) local consumption.
https://www.tva.gov/Energy/Valley-Renewable-Energy/Dispersed...
Net metering is not the same thing as only paying for what you use. Net metering means you could push 4 kWh during the day and draw 4 kWh overnight and get metered as zero consumption from the grid. This pushes a storage and distribution cost onto the utility and its other customers. Paying you at wholesale for the daytime push and charing you at retail for the nighttime draw moves those costs back to you.
What others are saying above is that you could generate 4 kWh during the day and consume it on premises, i.e. with air-conditioning or other day time appliance use, and still have zero consumption from the grid. This is also the point of the powerwall and any other on-premises energy storage.
That's true when you're using the power as you generate it, but when you sell it back to use later, you're essentially buying power storage. Efficient power storage is harder than efficient wheat storage, so they're not very comparable.
This seems the most fair way to handle power that is not generated by the utility. If the consumer wants to cut themselves off the grid and have enough extra solar panels and batteries to be self sufficient, that should also be allowed.
You mean they don't allow rich solar panel owners to get their grid battery subsidized by poor folks who lack the capital for their own solar?
This is a good thing. No power company should be forced to pay retail for power. It is a regressive tax on those that can least afford it. I don't think it was inappropriate to offer to get the industry off the ground, but it's quickly approaching the time to do away those subsidies - especially those that come directly from other rate-payers.
Nor should the power company force customers to buy the power that they generated themselves at the utility's price.
They already paid the capital costs for generating their own power. You want them to pay again? For the transmission lines and peaking plant that they aren't using?
Certainly, when the net usage is negative, the utility should pay only the wholesale cost of that portion of production in excess of local usage. When the net usage is positive, the customer should pay the retail price of that portion of usage in excess of local production. But it is nonsensical for the customer to sell the power they generate at wholesale, and immediately buy it back at retail. Immediate use should not be metered in either direction, and time-shifted use should account for peak vs. off-peak.
Otherwise, all you are doing is forcing the customer to use bigger batteries to route around your obnoxious local generation policy.
That "grid battery" is actually the natural gas fuel supply at the peaking plant that does not need to be used to supplement the baseline plant. Fuel that stays in the tank instead of being burned is the best "battery" we have right now. If you encourage people to use their own redox reaction batteries, you're lowering the efficiency of the entire system, and everyone loses.
>Self-Generation
The electricity produced serves the facility’s needs first. Any excess electricity is delivered to the power grid without payment. If the facility needs additional electricity, it must be bought from the local power company.
>Self-Generation and Dispersed Power Contract
The electricity produced serves the facility’s needs first. TVA purchases any excess electricity that is delivered to the grid. If the facility needs additional electricity, it must be bought from the local power company.
>Dispersed Power Sell-All Contract
All of the electricity produced and delivered to the power grid is sold to TVA. The facility buys all of its electricity from the local power company. (Two meters—one for electricity purchased by the customer from the local power company, and one for electricity generated by the customer and sold to TVA—are required.)
So no one would ever choose option 3, and no one would choose option 1, unless the installation was so small that the capital cost of the dual-channel meter would never be recovered. If it were truly the customer's choice, this would not be an issue, because the customer should always prefer #2 to #3.
So what does TVA do (if anything) to get customers to pick #3, or force them into it?
Also note that net metering is not an option. #2 uses a dual-channel meter to track outgoing power separately from incoming power. Net metering is not necessarily the optimal metering solution, either, but TVA doesn't even offer it.
Hmm, I think you may be confused/arguing against a strawman here, but I'll bite.
> Nor should the power company force customers to buy the power that they generated themselves at the utility's price.
No one is forcing customers to do this. I'm not sure where you get that from? If you are using more power than consuming, it does not leave your local premises. Only the excess power you are not using at that point in time is being sent. That's kind of the point of net metering.
> Certainly, when the net usage is negative, the utility should pay only the wholesale cost of that portion of production in excess of local usage.
Which is precisely what they do. Some are forced to pay retail - which was a temporary subsidy both to spur solar development and honestly was adopted largely due to billing convenience if nothing else 20 years ago. Easy to just let a meter spin backwards and bill/pay based on those numbers vs. developing entirely new billing software but everyone knew at the time it was temporary and financially nonsensical.
> When the net usage is positive, the customer should pay the retail price of that portion of usage in excess of local production.
Currently the case.
> But it is nonsensical for the customer to sell the power they generate at wholesale, and immediately buy it back at retail.
This isn't the case anywhere I've heard of, and definitely not the TVA. Even the linked article very clearly describes the situation as net metering as defined everywhere else. Customers are not sending all their generated power out their meter, then putting load on the "grid" on another meter back in. That would indeed be absurd.
> Immediate use should not be metered in either direction, and time-shifted use should account for peak vs. off-peak.
Completely agreed.
> That "grid battery" is actually the natural gas fuel supply at the peaking plant that does not need to be used to supplement the baseline plant. Fuel that stays in the tank instead of being burned is the best "battery" we have right now.
Yes and no. You might be surprised solar load does not match up nearly as well with peak power demand as is reported. This of course is a fine point to debate, and generally is in your favor.
My main point is that power companies being forced to operate a free battery for rich solar customers is immoral when think of who is subsidizing that free battery. Rooftop solar may be about the least valuable form of power to a power company as they can do nothing to schedule production, and the rest of the rate-payers shouldn't be forced to pay retail rates to the rich few who prefer to save $15k on a local battery pack so they don't need the grid battery at night.
I don't think we should force folks to require battery packs, but I also know that the financial incentives are currently lined up to have us end up with a bunch of rich folks paying nothing for power with solar systems, and a bunch of poor renters paying for 100% of the capex on things like the nuclear baseload plants so the solar folks get power at night.
"Thus, any grid-tied solar system within the TVA region must have dual metering, one to measure power coming off the grid, another to measure power going to the grid. The arrangement with TVA is likewise “buy all, sell all” in that you have no choice but to sell all the power you generate to TVA, then you buy back whatever you actually consume."
> Customers are not sending all their generated power out their meter, then putting load on the "grid" on another meter back in. That would indeed be absurd.
That is exactly what the linked article claims is happening to TVA customers: "Thus, any grid-tied solar system within the TVA region must have dual metering, one to measure power coming off the grid, another to measure power going to the grid. The arrangement with TVA is likewise “buy all, sell all” in that you have no choice but to sell all the power you generate to TVA, then you buy back whatever you actually consume."
How is it crooked? The utility company pays to builds and maintains the grid infrastructure with the expectation they can use the infrastructure to sell power to consumers.
One person selling back some unspecified amount of solar with questionable reliability, without the utility company having any say when the power is provided, isn't exactly a very useful thing for a utility company, so it's surprising they even pay the same wholesale rate.
Why not get a basic battery system and use that to power some loads in your house, instead of buying power from the utility company for those loads?
You're not allowed to use the electricity you generate. _All_ power you produce is sold to the utility at wholesale. _All_ power you consume is purchased from the utility at retail. Two separate meters.
Wait what? How? Is this a Tennessee specific thing? This seems absurd and impossible to enforce.
If I hypothetically spend a couple hundred bucks on a solar panel, 12v lead acid battery, and basic 12VDC -> 120VAC inverter, put those items on a wagon, and drag it across my yard to use power tools where an extension cord won't reach is the power company going to arrest/fine me? Is it only illegal once I use the batteries/inverter under my own roof?
If i understand the article correctly, it's illegal when you wire it to the grid. So, powertools and a battery will be fine. i suppose you could have a big switch outside your house that lets you pick local generation or grid generation, ala a datacenter failover switch.
But nobody wants that. Really, i don't think many people care about selling the power back either. But they've made it already, why waste it? What people want is i'll make the first 5 kwh, and i want to buy any extra from the grid. And i don't want a big switch system for each light in my house. Which seems very normal and sane.
Oh, that's exactly what I want, and have been researching for myself. I'm taking it even further and planning on being able to switch individual circuits between battery and grid.
If that idea is dumb somehow I'd love to know more resources about why. From my perspective it's a better solution than grid tie, but I value resiliency and reliability as well as pure cost alone. If I still lived in a city where the power literally never went out for years at a time, then having a local backup would not be really attractive.
And considering the regulations, it seems like the system I'm considering would also be able to basically satisfy the desire for "i'll make the first 5khw". Select a circuit that draws at least 5 kwh/day, run it off batteries until the battery bank voltage drops below a threshold, and then switch over to the grid.
I’m not an electrician, and that’s who you should talk with.
However, it’s way easier to just trip a breaker when the power goes out. The whole neighborhood is drawing from your battery, breaker flips and you are done.
A single meter tie is simple. You use what you generate. Any extra makes the meter run backwards. You draw more, you pay for it. The infrastructure probably can’t handle whole neighborhoods doing this.
IMHO, they should charge a flat monthly fee for the option to connect.
If there's an electrical link between your system and the public grid, you're playing by the grid's rules. If you don't want to play by the grid's rules, you can't connect to the grid in any way.
p.s. Even if buy-all-sell-all doesn't make sense, requiring your electrical setup to meet grid standards does make sense. It's be surprisingly easy to cause a blackout, or to kill yourself, by messing it up.
It’s up to the states to decide I guess. In my state, the local power company lets you use what you need and then sell what you don’t use at whole sale rates.
They will send you a check if you produce more than you consume. I’m not sure if you had to pay for the meter but they would install one.
PG&E here in Northern California does offer net metering -- sell to them when the sun is up and buy back at night, guaranteed a wash in $$. Good deal for us.
This could be because of the Commerce Clause in the Constitution. It basically regulates all commerce at scale in the US of A. I bet TVA took its position because of Roscoe Filbrun, a wheat farmer with a similar argument in 1942. This is a really great piece on it if you're interested.
Back in the 1980's, Amory Lovins, of the Rocky Mountain Institute, would say that the easiest way to "expand" energy production by 25%, was to deploy existing high-efficiency technology.
I saw him present with the head of a power company in Iowa. As they said, one might think this was bad news for the power company and that they would fight it -- more power equals more revenue. However, some of that power is very expensive power with low margins -- quick but costly production to meet demand peaks.
With deployment of high efficiency devices, those peaks declined. Other means of shifting consumption, such as "cooling rooms" that run at night, building ice or other thermal sinks to drive cooling during the daytime, also helped.
The utility had lower absolute demand, but flatter demand for which they could better plan and produce, at lower production cost. So, the efficiency push ended up being a plus for the utility. They were busy distributing then-new compact fluorescent bulbs and the like, as part of public outreach.
We don't face the exact same scenario, now. But, institutions can either get with the program, or get left behind.
(Or, they can try to "capture" and monopolize the system. Such as the Koch brothers with their "clean coal" and all; not wanting to lose their sunk costs and anticipated earnings.)
One thing I don't support, is the existing entities that have dragged their feet also using their assets and momentum to take over the... "next generation" energy system. I'd rather limit the perpetuation of their mindset and behavior. Some conservatism, especially in large, essentially public and critical endeavors, is good. Distorting same to meet personal goals, is not.
They've already bought a large battery - bolted under their electric car. Perhaps one day our cars will drive us into work, we'll plug into the grid there (or have it drive itself home), and home solar will talk to the grid and tell it how much to,charge our car during the day. Then we'll go home and run our house off the car battery overnight, making sure to leave enough battery power to get to work the next morning. Or party on Friday night because it was sunny and we have a couple dozen extra kilowatts that don't need to be saved for commuting in the morning!
Some energy sources will be low directing certain times of the day, and others will be high, causing it to mostly average out.
And for the stuff that doesn't average out, there is peaker plants.
Things could be further made better using varying electric pricing, such that when energy is plentiful it is cheap, and when it is scarce it is expensive.
Agreed - quite a lot of the power from my solar panels is currently being fed back into the grid but this will change in a few years when I replace my hybrid car with a full electric. Electric transport is definitely the main source of growth in electric power consumption.
This is one of those cases where I wonder if the traditional Chinese Healthcare Payment Model might be something that could be applied to other industry sectors.
That is: traditionally in China, you paid the doctor when you were well. When you were sick, treatment was offered without payment. The alignment of incentives is for patients to be healthy (or, for the cynical amongst you: for the doctor to be able to credibly claim this).
If various services were offered not on the basis of inputs consumed (as with electricity), but on the basis of outputs enabled, this dynamic would change.
For employees, this is the difference between measuring based on hours worked (or worse: present), and on deliverables achieved.
There's some complications to this: piecework payment is something that's long been criticised (Adam Smith argues against this in Wealth of Nations, 1776), largely in that it tends to overwork, even in the absence of overt coercion. Prices ultimately are meant to cover costs of provisioning, and there's the need to see that those costs are met. Measuring what is directly transacted is easier than measuring either complex inputs or often-at-a-remove outcomes (Smith also discusses the former, the latter is the topic of many decades of Monitoring and Evaluation theory and practice).
I totally agree with the sentiment here. If the utility is public, it exists to serve the people electricity, all of the people, whatever their needs may be. So it seems like the fair thing to do is for the utility to charge the rate it needs in order to maintain and upgrade its equipment. Then just divide that into the total usage and make the people pay the total adjusted for their individual use compared to the average.
California actually changed the incentive structure for PG&E to deal with this issue. One of the reasons California has had flat demand despite growing a lot.
There's no good reason for networks or last mile infrastructure to be privately run in the first place because competition does not come about naturally. The incentive of a private owner will always be to sit on the network and collect rents and spend as little on maintenance and infrastructural investment as possible.
Which is why any service or utility required to maintain the standard of living and comfort we all expect should be tightly regulated or non-profit in nature to remove the incentive to extract the most profit while providing the lease service.
Is that because the product is 100% fungible? Electrons are electrons and there’s no such thing as “better electrons” once you hit a certain quality threshold?
I’m trying to understand why your characterization doesn’t apply to, say, programming talent. Once I have stable of coders working for me, what’s my incentive to do more than the bare minimum of maintenance work for them, and just collect rent on their productivity?
To me, it seems like you’re just describing capitalism: cash seeks rent.
I think the usual argument is that utility companies tend to be natural monopolies due to the extremely high cost (relative to the size of the market) of installing infrastructure to every single building.
That's monopoly in action. Given right-of-way exclusivity, there's little reason to endure the enormous costs of upgrading. Were other companies given opportunity to compete, you'd see a lot more improvements in shorter times.
...hence the explosion in wireless technologies: multiple providers can easily cover the same areas, and must compete with improving services. It's almost to the point of overtaking wired services in both data rates & cost (just get those monthly data caps up and I'll switch).
>It's almost to the point of overtaking wired services in both data rates & cost (just get those monthly data caps up and I'll switch).
The data caps can't be removed. Wireless has much lower bandwidth limits overall--the spectrum would be saturated if everyone decided to move to wireless. It can't happen with current technology.
Data caps are equivalent to an horribly designed token bucket, where the tokens are all added at once at the beginning of each month. Using a proper token bucket policer/shaper should be much better at preventing spectrum saturation.
Still won't be enough to move everyone to wireless. We won't be able to replace more than a small fraction of our wired bandwidth with wireless anytime in the foreseeable future.
I think your statement is true only if you consider the area covered by a single tower to be fixed.
If a given volume of space can only handle so much bandwidth over the EM spectrum, it seems the logical solution would be keep the range smaller and put antennas (with wired backhaul) in more places. Similar to how wireless companies do a lot of special capacity work in large stadiums, etc. [1]
Of course, as the range decreases and the number of towers increase, the cost dynamics start to resemble the same last-mile cost problem more and more, but at least:
- you don't have right-of-way problems (presumably any company can lease EM spectrum)
- You can choose the areas install more shorter-range towers based on demand
What you're describing would increase bandwidth. It's basically the plan for 5g.
However, it still won't come close to replacing wired bandwidth. There is a limit to how low you can reduce transmission power and still get blanket coverage therefore there is a limit to how close together these towers can be without interfering with each other, and a corresponding limitation on bandwidth for a given area.
You'd need to move the towers down to something close to the range of Wi-Fi to provide enough bandwidth to come close to working. And at that range you basically have all of the exact same problems of wired internet.
>you don't have right-of-way problems (presumably any company can lease EM spectrum)
You still have significant right-of-way problems because you still need to provide the wired backhaul for these towers. Unless you want to piggyback on the existing wired infrastructure--in which case you need to pass laws to force existing providers to let you use their pipes.
Wireless internet isn't a solution to the problems we face with ISPs. It might help to provide some limited competition, but the physical limitations prevent it from replacing wired internet.
> You'd need to move the towers down to something close to the range of Wi-Fi
It's my understanding that LTE and 5G are designed to scale such that the density of cell towers matches the density of the population. Thus in rural areas you have fewer high powered tower and in urban centers you would have many low powered micro towers.
> You still have significant right-of-way problems because you still need to provide the wired backhaul for these towers.
In downtown Atlanta they have ground level LTE installations with wireless backhauls at heavily traffic intersections attached to the street lights.
>It's my understanding that LTE and 5G are designed to scale such that the density of cell towers matches the density of the population. Thus in rural areas you have fewer high powered tower and in urban centers you would have many low powered micro towers.
None of what you said is wrong, it's just not enough.
5g is still under design. It's just a specification for minimum speed, latency etc...
The most likely way to accomplish it is through small cells operating at very high frequencies (milometer wave). The problem with high frequencies is that they don't penetrate obstacles. They require direct line of sight, A canvas awning would block the signal.
For 5g to operate at the desired speeds in high density areas, you'd need them on every street corner, and you'd still need lower frequency higher powered transmitters to act as a backup in the very likely scenario that you aren't in direct line of sight of a millimeter wave tower.
In rural areas you could just use the lower frequency higher powered towers. However, the farther from the tower you get the lower the bandwidth. Combine that with the higher noise floor you get at lower frequencies, and the fact that transmitters cover a circular area and you need a large amount of overlap.
In either scenario, rural or urban there is no good way to replace wired access. Although it would be more likely in very rural areas.
In urban areas as I've already said, the tower density needs to be so high, that you lose the advantages that people are hoping will make wireless more competitive. At that density you have all the exact same problems that lead to a natural monopoly.
>In downtown Atlanta they have ground level LTE installations with wireless backhauls at heavily traffic intersections attached to the street lights.
This doesn't solve the right of way issue at all. If you've already got to the street corner, you've already solved the right of way issue.
Getting from the road to houses isn't the difficult part. Homeowners will grant you access, they want access. It's getting to
the street corner that's a problem.
One of the primary focuses of 5G is to reduce latency and LTE has reduced latency tremendously.
My personal experience looking over test logs on my phone is that LTE averages ~40ms with a low of 25ms and a high of 80ms. My home internet averages ~16ms with a low of 12ms and a high of 44ms.
Gaming is one of the few things where you can really tell the differences between sub 100ms latencies and so for most people wireless internet is more than sufficient.
> Can you say, briefly, what you mean by "pure capitalism?"
> To me, pure capitalism would be laissez-faire, within the context of a rights-respecting society.
I mean withOUT the context of a rights-respecting society. The capitalism that we have only respects the rights of others when compelled to do so.
> Sometimes, companies respond by innovating solutions that deliver more value at a lower price.
Yes when there's competition or the consumable isn't a necessity. In many municipalities it's a legal requirement to have running water and/or electricity, particularly if you have children or the elderly in the house; which means not buying is not an option. Utilities are commodity service providers; Southern Company's electricity is no better than Duke Energy's. They do not have any competition because markets have been carved out and consumers do not have a choice. They mostly don't develop the delivery technology, they just purchase it from others (e.g. GE).
With all that in mind, what is the motivation to innovate? So that the customer will be less angry at you as they write you the check each month?
What's the motivation to reduce costs? Lower costs might drive up demand which might put additional strain on infrastructure (look at the issues in Australia) and drive up maintenance costs. Lower costs might also require additional capacity which means capital investments.
The best place for a utility is to convince to you use as little as possible while charging you as much as possible in static fees each month.
Seemingly everybody has their own definition of capitalism. Everybody also thinks that right thinking people share their definition and people who don't are Just Wrong.
It makes arguments about it a little pointless because six different, intelligent people are arguing about capitalism are usually arguing about six related but different things.
That's why it usually makes a bit more sense to argue with language that has a tighter definition - like "monopoly".
I would argue that it is. When a business is operated for profit and individuals are incentivized by profit then tactics to capture and hold market share are going to be used.
What better way to maintain your profits than to have the government preventing others from competing with you.
It's all quasi-privately run in the US. They aren't expected to compete because like said it isn't natural. But governments are generally incompetent at building and maintaining power grids.
In the past, investment was been encouraged by allowing these companies a set rate of return on capital investments, but allow no profit on expenses. Thus, the energy company would get 10% return on any investment. This actually lead to over-investment in infrastructure--called gold plating. You need a new power tower? Build it as expensively as possible, with all the bells and whistles.
Now, there are newer forms of price regulation designed to eliminate gold plating.
>The incentive of a private owner will always be to sit on the network and collect rents and spend as little on maintenance and infrastructural investment as possible.
Governments have exactly the same incentives. And the results are clear. US public infrastructure is fucking terrible.
Puerto Rico is one example of public energy company. Didn't do so hot.
> In the past, investment was been encouraged by allowing these companies a set rate of return on capital investments
I've worked on so-called "cost plus" government contracts before, and the results were astoundingly bad. As a curiosity, what's your take on "cost plus", but with the "plus" being fixed profit on the initial bid instead of on the final invoice. The contractor will still be made whole on all of their costs, but there's a reasonable incentive against prolonging the contract indefinitely (i.e. the fixed margin)
> Puerto Rico is one example of public energy company. Didn't do so hot.
To the north, Saskatchewan has a 100% government-owned power company (SaskPower), and the result is generally quite positive. We have a land mass of 251ksqmi (approximately Texas) but only around 1.1M people. Agriculture makes up a significant chunk of our economy, and one of the big picture benefits of SaskPower is that urban and rural rates are approximately the same, even though the marginal cost of adding a new rural customer is waaaaay bigger than that of an urban customer. Our rates (once factoring for currency conversion) are pretty similar to Texas ($0.11USD/kWh here vs $0.08-0.09 there).
>governments are generally incompetent at building and maintaining power grids.
When you strip out the market discipline imposed by competition, governments are usually more efficient than equivalent private sector operations.
Privately run monopolies are - similar to governments - only kept in check by democratic accountability. The difference with a privately run regulated monopoly is that that democratic accountability is one step removed.
As you said, it's quasi private - because the system would collapse under the weight of unchecked rent seeking behavior if it weren't heavily regulated.
>Governments have exactly the same incentives.
Believing that elections and power seeking does not motivate government decision makers is an odd opinion.
I love the "(and they must always be forced)". Very naked display of political power, that. It's very far from obvious that forcing utilities to subsidize others is a good idea.
It is neither a "naked display of political power" nor "forcing them to subsidize others".
The utilities have been granted a monopoly by the govt, and in exchange, are subject to regulations. If anything is a "naked display of political power" it is the granting of a monopoly.
The reason the monopoly is granted, is that it is most efficient as a society to have a single successful power distributor than to have multiple failing ones with redundant infrastructure (power poles, lines, etc.). And, for monopolies, to regulate them to reasonable profits instead of allowing any winner of the failing competitors to establish a rapacious monopoly.
With new developments in rooftop solar and batteries making it economical, it is sensible that these distributed modes be supported, and the system migrated towards distributed power. I've always wondered why this wasn't done sooner as a civil defense measure (as the interstate highway system was built as a defense measure, to transport troops to either coast in 24h). As such, they are only being forced to subsidize their customers' ability to either generate power or live at greater efficiency.
That the last-mile costs are so extreme that utilities must be monopolies is not obvious either. We've built out the last mile in the U.S. many times over for many things, and where we've allowed it (as opposed to preempting it a priori) we've had competition (e.g., cable). Even where we don't have direct competition, we do have indirect competition where consumers can vote with their feet (e.g., power rates vary regionally).
Obvious or not, at the time the monopolies were granted, that was the assessment.
And yes, in dense areas, we may have two cable competitors who've both built out the Last Mile. But it is not everywhere, and there are many areas where there is zero build-out, and the only service you can get is DSL on old copper maintained by the TelCos.
Moreover, the monopoly system for Electrical and TelCos was adopted requiring them to provide service to ALL, both the highly profitable dense urban neighborhoods and the massively unprofitable rural areas with one farm every several miles. See the Rural Electrification Act of 1936.
The fact that it was done this way pushed the US very far ahead in the world, providing both electrical and telephone service almost everywhere.
The fact that the Internet was NOT done this way puts us somewhere out the top 25 in Internet service.
Central planning will create a disaster when completely relied upon, but completely avoiding it will also create a disaster. Some things work as a system and society with a measure of applied foresight.
My local utility charges users $5,000 per installed pole for last mile connection. I've priced poles and wire, they are turning a hefty profit for last mile connections.
How many people does it take, and how much equipment? If they're using contractors and have to, say, hire a crane, things can add up pretty fast.
That doesn't mean that they're not necessarily price gouging or making a profit, but often things like poles and wire are a small part of the actual cost of installing infrastructure.
> To be clear: For both economic and environmental reasons, it is good that US power demand has decoupled from GDP growth. As long as we’re getting the energy services we need, we want overall demand to decline. It saves money, reduces pollution, and avoids the need for expensive infrastructure.
> But the way we’ve set up utilities, they must fight that trend. Every time they are forced to invest in energy efficiency or make some allowance for distributed generation (and they must always be forced), demand for their product declines, and with it their justification to make new investments.
> Only when the utility model fundamentally changes — when utilities begin to see themselves primarily as architects and managers of high-efficiency, low-emissions, multidirectional electricity systems rather than just investors in infrastructure growth — can utilities turn in earnest to the kind planning they need to be doing.
edit: replaced expectations by incentives which is what I meant