Guest Post by Willis Eschenbach
I got to thinking about the way that California prices its electricity, which is never a good thing for a man’s blood pressure.
When I was a kid, the goal of the Public Utilities Commission and Pacific Gas and Electric was to provide cheap electricity. The Bonneville Dam and the Shasta Dam were lauded for bringing cheap, renewable electric power to the farms, just like the renewable electricity the Tennessee Valley Authority had supplied earlier. This cheap electricity was seen as liberating housewives from domestic slavery, and supporting business and manufacturing. It was hailed as the wave of the future and the path to success, and rightly so—cheap energy is the reason the developed world was able to lift itself out of poverty. And since we generated our own electric power when I was a kid, and had to live with the results when it went out, I know all about the ability of electricity to lessen even a kid’s load around a cattle ranch.
So … when did expensive energy become the new goal? When did raising the price of energy become a good thing? That’s topsy-turvy thinking.
I started this train of thought when I had occasion to revisit Anthony Watts’ outrageous electricity bill, which he discusses here.

Figure 1. Why California is circling the drain …
Ninety-two cents a freakin’ kilowatt-hour? The utility companies have a monopoly, and they are allowed to charge ninety-two cents a kilowatt-hour? How can that be? Isn’t the California Public Utilities Commission supposed to stop that kind of thing?
The most aggravating part of all of this to me is that so many people see this kind of pricing as being a good thing. Not the ninety-two cents part, most folks find that outrageous.
But lots of folks apparently approve of the part where the higher the demand for the electricity, the more the utilities charge for it. This is called “Time Of Use” pricing, and a lot of well-meaning people think it’s a good idea … not me. I figure that’s because they just never thought it through all the way, they never saw what’s at the other end of the spoon.
Now, the utilities claim that Time Of Use pricing is a good thing because it spreads the load more evenly over the 24 hours … but why should I care? That’s their business, to provide enough power for all conditions when and as needed … but I digress. Hang on, I can likely find an example of their justification style … OK, they say the reason for Time Of Use Pricing is:
“To ensure greater power reliability and a better energy future”.
Impressive, who wouldn’t want a better future. Can I translate that for you?
“Greater power reliability” means so they won’t run out of power. If they were honest they’d say that they have Time Of Use Pricing “to avoid brownouts because we don’t have adequate generation capacity”. And ensuring a “better energy future” means “we hope we can provide future power but only if we raise prices on you today.” I’ll return to this issue in a moment.
But in any case, what kind of heartless bastards charge you more for something when you really need it? Because with “Time Of Use” pricing, when Anthony’s wife and kids are suffering in the scorching heat in Chico and really need the aircon, Pacific Gas And Electric (PG&E) and the California Public Utilities Commission say “Fine, you folks can turn on your air conditioners … but it will cost you almost a dollar a kilowatt to cool down.”
I never in my life thought I’d see electricity pricing used as a weapon against the poor and the old folks like that. That is criminal. What a plan. The seniors can afford to air condition their apartments or their rooms whenever they don’t need to … but when it’s hot, when they really need to air condition them, they can’t afford to. Catch-22, thy name is legion.
Now, don’t get me wrong here. I’m sure the Public Utilities Commission didn’t intend that outcome. I’m not accusing them of deliberately trying to cook Grandma. To do that you’d need some smarts, and anyone implementing a plan like that clearly has no smarts to spare on Grandma. Sadly, it’s just another case of Noble Cause Corruption, where the noble cause of saving the world from Thermageddon™ has overwhelmed native common sense and compassion.
Seriously, folks, this kind of pricing is madness, it’s unacceptable. If we had a water utility, and they charged 5¢ a glass when you weren’t thirsty, and $5.00 a glass when you came in dying of thirst, everyone would scream bloody murder that as a public utility you can’t screw the customers like that. Pick a dang price for a glass of water and stick with it, you can’t be jacking the price through the roof on someone just because they’re thirsty, that’s not on.
But that’s exactly what’s happening with electricity. Air conditioning in Chico is becoming the province of the wealthy, due to the “Time Of Use” pricing policies of the PUC.
However, the PUC are not the villains here. They are caught in the middle because of the stupidity of the voters and of Governor Brown. The voters put in a very destructive “20% by 2020” plan requiring 20% of the electricity supply to come from renewables by 2020 … then Governor Moonbeam had a Brilliant Idea™, so he unilaterally raised it to 33% by 2020. I don’t know how he jacked it by himself, but his daddy was the Governor and he grew up in the state house, so he knows which side of the bread the bodies are buttered on … these things are mysteries to the uninitiated like you and I.
And of course, it’s nearly impossible to build a fossil-fired plant of any kind anywhere in California anyhow. I hear these days when you apply for a license in California to generate electricity from fossil fuels, the State Government just issues you a couple of lawsuits along with the permits, in order to save time …
So you can’t build fossil plants, and renewable plants are few and far between … and as a result the system operators, a company called CAISO, are always balancing on the edge of a “brownout”, when the power doesn’t go out, but you only get 90% of the voltage, or on the verge of rolling blackouts, the next step after brownouts … and we’ve seen both.
And to put the icing on the cake, somewhere along the line, some congenital idiot ruled that hydroelectric power doesn’t count as a renewable energy source. I hope that person roasts in the place of eternal barbecue and HE doesn’t have the money to run the air conditioner. Truly don’t think I’ve heard a more expensive and destructive ruling than that one, especially after the TVA and Bonneville Dam and Shasta Dam have shown that yes, idiots, hydropower is indeed renewable. Yeah, dams have problems and there’s lots of issues, but last I looked the rain is still working both reliably and renewably …
So by 2020 we’re suppose to get a third of our power from solar, and rainbows, and wind, and hydrogen, and biomass, and methane from the digestive apparati of unicorns, and fuel cells, anything expensive and out of reach will do. The suppliers of these nostrums have the state over a barrel, of course, and demand outrageous prices.
And as you would predict, this unbelievable idiocy has left the state woefully short of power. And as a result, the whole program has gone into reverse.
So now, rather than increasing the amount of cheap electric power available to the consumer like a utility should, we’re going the other way. The PUC and PGE aren’t encouraging people to utilize cheap power in order to better their lives. They aren’t doing their job of ensuring an adequate supply of inexpensive power. Far from it.
Instead, they’re doing whatever they can to push people back into the dark ages, because they are UNABLE TO GENERATE ENOUGH LIGHT OUT OF UNICORN ERUCTATIONS TO FILL THE DEMAND …
So that’s why, when they say the pricing is to “assure greater power reliability”, that’s a lie. They are using that pricing to discourage demand. Have you ever heard a dumber thing than a business working to discourage demand? Who anywhere tells their customers to buy less? Why jack your prices to force them to buy less?
Well, because they don’t have the power generating capacity. And this in turn is because for every two fossil-fueled or hydroelectric power plants you build, you need one unicorn-fueled plant, and those damn unicorns are proving much harder to catch than Governor Moonbeam figured …
But even given that that is the case, and given that the PUC is caught in the middle, there has to be a better plan than cooking Grandma to deal with that problem.
The people pushing these rattle-trap schemes, like “Death Train” Jim Hansen, always talk about the grandchildren … meanwhile, every one of their damn plans, of carbon taxes, and cap-and-trade, and subsidies, and requirements for “renewables”, and regulations, and all the rest, every one of them does nothing but screw Grandma and the rest of the poor.
Those plans do nothing but raise the cost of energy with almost no benefit to the environment.
They don’t reduce CO2. They don’t save the planet. They don’t help the environment. At best, with a following wind they might make a difference of a couple hundredths of a degree in a century. And indeed, because they further impoverish Grandma and the poor, they are actively harming the environment.
And meanwhile in the present, far from the ivory towers where they entertain their century-long fantasies, on the other side of the tracks, out of sight from the houses of the wealthy, the reality of these destructive, ugly policies hit Grandma and the poor of California the hardest. The head of the PUC doesn’t have to worry whether he can afford to air condition his sick child’s room … the CEO of PG&E isn’t losing sleep over his electric bill.
I fear I have no magic bullet to solve this. It will be a slow slog back to sanity. All I can do is to highlight the issues, and trust that at some point people will come to their senses.
So all of you folks that think that fighting CO2 will make a difference decades from now, remember the difference that this pseudo-green insanity is making today. Your actions are cooking Grandma, impoverishing the poor, and harming the environment today, and history will not find your part in inflicting pain and deprivation on society’s weakest members to be funny in the slightest. I truly don’t care if you think the poor in 2050 desperately need help from some imagined tragedy. You are screwing the poor today.
My best Independence Day wishes to you all, and remember, the beauty of America is that you’re all free to air condition your houses … but only when it’s not hot.
w.
Sandor Ferenczi says:
July 5, 2013 at 4:57 am
Problem is, the way they want the reductions, only the elitists and malcontents would be left. The rest of us–who use our brains and are pretty much the producers/industrialists–are just supposed to “disappear” somehow.
It would make the situation even worse.
Gamecock
Jeeeeze . . . not the thorium hoax again.
“Its only a matter of time” is not the same as “they have gotten it to work.”
In the real world, nuclear fuel created by thorium alchemy must compete with other sources of nuclear fuel. We are hundreds of years from that happening.
I’ve already said nuclear has been displaced by cheap gas, and will continue to be displaced as long as the supplies of cheap gas hold up – or until China or India create a nuclear system so cheap it displaces Shale Gas.
My point about nuclear power is that it is preferable to crappy unreliable and in some cases incredibly dangerous renewables.
The following is the story of the worst renewable hydro disaster in history, it killed over 100,000 people. No nuclear disaster other than the attacks on Hiroshima and Nagasaki (which can hardly be classified as nuclear power disasters) has ever come close.
http://en.wikipedia.org/wiki/Banqiao_Dam
Any rise in CA heat stroke statistics wil be definitely blamed on global warming.
u.k.(us) says:
July 4, 2013 at 10:56 pm
“Per Wiki:
An engineer is a professional practitioner of engineering, concerned with applying scientific knowledge, mathematics, and ingenuity to develop solutions for technical problems.”
US engineering students in the early ’60’s were taught that the solutions were to be cost-effective.
Cost-effective power generation today is best represented by CCGT. Relative low first cost, high efficiency, small foot print , relative low emissions, plentiful fuel.
@ur momisugly Sandor Ferenczi says:
Yet another reason to get the world’s population down to a billion or less.
My standard response to those advocating the reduction of the world’s population – after you dear boy……
I believe, Roger Sowell, that once California cuts supplies of electricity from coal-fired power plants, you’ll find your electricity rates will “necessarily skyrocket”.
From what I’ve read, the US Government isn’t supportive of petroleum/natural gas exploration and development on their lands, so natural gas-fired plants won’t be expanding (which, from what I’ve read in your comments, you believe to be the only source of cheap, more plentiful electricity).
What is your solution to cheaper electricity? And please don’t use the “subsidize the poor” argument–that doesn’t make electricity cheaper; it simply requires that somebody else pay for it.
Your plan is…….what?
Eric Worrall says:
July 5, 2013 at 5:26 am
My point about nuclear power is that it is preferable to crappy unreliable and in some cases incredibly dangerous renewables.
======================================================
Agreed.
Perhaps Roger Sowell would be kind enough to tell us how old, illiterate, immobile, lonely Gramdma is supposed to get to one of these cool buildings he refers to; if she even knows about them. Why should she not be able to cool adequately at least one room in her own home in order to survive a very hot spell. Greenie patronising always makes me livid. They are just not living in the real world and obviously simply do not care about real people.
Roger Sowell it seems to me that this time you have slipped into defending the indefensible, the programs you are talking about are great but wouldn’t less people need them if the rates were lower? The whole point here (maybe I am wrong Willis would have to say.) is that gouging the customer when they need to power the most is wrongheaded and reprehensible and the people that these schemes say they want to help are hurt more by the scheme than if we had no scheme I have read your posts and while I disagree with your views on nuclear power I enjoy reading them but you seem to have seen this post as an attack on programs to help the poor when what it really says is the poorest of all are hurt the most regardless of programs put in place to help them with the bill if we didn’t have the idiotic programs in place that raised the electric bills less people would need those assistance plans…………but then again that could be the whole point as the more people that depend on the government for everything the more power said government has over their lives, we have come to a point where both Orwell and Huxley were correct and the powers that be are tightening the grip.
Annie
Greenie patronising always makes me livid. They are just not living in the real world and obviously simply do not care about real people.
Greenies think complex climate models are more reliable than simple observations, so it stands to reason that they would see the world in terms of the way they think it should be, rather than as it actually is.
“I never in my life thought I’d see electricity pricing used as a weapon against the poor and the old folks like that.”
Willis, here is what I believe is going to happen. Taxes on the middle class and higher will simply be raised to subsidize the energy costs for the people who can’t afford it which means the middle class will be getting it twice in the shorts from higher energy costs.
From what I’ve read, global warming looks to be a tool to redistribute wealth both within and between nations.
Every year the weather precipitates(snow, rain etc.) upstream from the dam.
Is this not (potential) energy that has been renewed? Of course it is.
Hydro-electric power is obviously renewable. To say it’s not is false.
For that to be in California’s legislation is blatant propaganda, crony capitalism for solar and wind boondoggles.
The mandate should be pretty easy for California to meet. Keep up the policies that are in place, a substantial portion of the population will move. The ones moving will likely be people with large houses that are expensive to cool – you know, the people who pay the taxes. Additionally the evil corporations will move. Shortly the demand will drop to where the existing capacity will meet the legislative requirements. By the way, Texas has more wind power and doesn’t have those $0.92/kWh rates.
Ah, but see, as insane as this is, low income grandma doesn’t have to worry. The ever benevolent state will step in a take some money from those of us who really can’t afford it, but our raw numbers say that we can. They’ll take it in the form of taxes and make programs to subsidize low income grandma so that she can power her air conditioner. It’s you and I who will have to find other ways to cool off when we have to cut back on our energy use because our money was taken and we can’t pay for energy during peak hours.
“” Sandor Ferenczi says:
July 5, 2013 at 4:57 am
Yet another reason to get the world’s population down to a billion or less.””
Sir, I trust your Sisters, Daughters, Nieces, Wife have all been properly sterilized.
you wouldn’t want to look like a hypocrite…
Here’s a website about the avialebility of LPG in California: http://www.consumerenergycenter.org/transportation/afvs/lpg_propane.html
I also have some German sites about LPG applications including home block heating systems with an efficiency of 90%. Just translate with Google translate and most of the content will be readable.
http://www.propan.de/anwendungen/heizenergie/blockheizkraftwerke
http://www.fas.de/
http://www.brc.de/
http://www.fluessiggas-direkt.de/?gclid=CJaLocetmLgCFXMdtAodRRoAog
http://www.progas.de/uploads/tx_rmbmdownload/Betriebstankstellen_0211_02.pdf
I really think the time has come to think about home power generation opportunities. Getting off grid is the only way to make the power producers and our crazy government planners come to their senses.
Hopefully this is a joke.
What exactly is wrong with tying the cost of energy to the cost of producing it again? If people have a problem with coal/natural gas, then go off the grid with solar.
My power bill says I’m paying $0.11130/KW.h
5 decimal points even.
Taxes and surcharges bump the total to $0.15 / KW.h
Eric,
If people go off the grid it will largely not be with solar, it will be with natural gas fired generators. Would you prefer Nat Gas be burned with 63% efficiency at a central location and then delivered with 5-10% line and transformer losses, or burned with 28% efficiency in a generator?
Where are the switches that California uses to discriminate between renewable and coal power?
How can power generation sources be discriminated once added to the grid?
Like CO2, it’s all the same; the “good” is indistinguishable from the “bad”.
BTW…where are people supposed to sleep in these cool havens if the hot spell lasts more than a day?
My experience of shopping malls in Australia and Dubai is that they are hell on earth. All echoey noise and ghastly muzak and uncomfortable seating and overpriced junk food…yuk. Not for this Grannie thank you!
Willis—
Another fun and informative post. But as an aside, I noticed trademarks with “Thermageddon™” and “Governor Moonbeam had a Brilliant Idea”. Is that for real or a joke? I hadn’t seen TMs with those phrases. I scanned the comments to see if anyone had asked before me.
Thank you.
Kramer @ur momisugly 6:06 am:
Spot on.
That does not mean that this was the only death casted by the heat wave. Most of the deaths can only be seen as a statistical increase in the death rate compared with the average death rate in the same area. This is a frequently used method to analyze the effect of extreme weather.
The European heat wave of 2003 was for instance analyzed in peer reviewed reports which places the death toll at 70,000. See: http://www.sciencedirect.com/science/article/pii/S1631069107003770
One should therefore expect to find at least some thousands extra deaths by using similar methods in California