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.
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A very enjoyable read. Electricity rates continuously vary according to demand. Supplier generation is either base load, picked up on “day ahead” estimates or spot demand estimates. The rates are all over the map, from positive to negative. In the PJM area they tend to stay in the $20-$80/MWh range. The rates also include peaking units that are paid when they run and when they don’t run (capacity payments) as well as subsidized RESIDENTIAL rates (granny’s rates).
Mr. Sowell seems to like the economic theory of arbitrarily raising rates and then subsidizing some of those hurt by the arbitrary rate raise. This is part of environmental justice. He sort of misses the lost economic opportunities from lower rates for every consumer. This is like keeping a water bucket with a hole filled and increasing the size of the hole as needed. I’m sure as an engineer he can give us the global (or even CA) temperature reduction from these actions and show that we can actually reliably measure the temperature change. One of the things I love about the AGW argument is that it is based on unreliable temperature measurements and then taken to resolutions you can’t measure.
The argument over who said what to whom is fruitless. Why, continue the argument, Willis? I buy the substance of your post, mostly.
PS. I’m not the expert others are on electrical rates and green energy. I’m the environmental manager for a company that has 16 landfill gas to electricity facilities in 6 states. We also convert LFG to pipeline gas that sells for about 3x the cost of natural gas. We produce electricity on the peaking market or to fill green energy portfolios. The RECs and green energy portfolio’s are scams in my opinion, but that’s our system now.
As a Monty Python skit once said “I paid you five dollars for an argument” well it seems that Roger paid his and we are all invited. My two cents says some states have anti gouging laws and high rates in extreme heat would fall under that law for any business except a public utility, why? Because they failed to have enough capacity for their customers when it is all foreseeable mot a really good excuse.
Roger Sowell says:
July 4, 2013 at 10:40 pm
You sometimes have a valid point in your long-winded posts, but you do not have on this one.
============
The point appears quite simple. Folks in California, in a country where the free market is supposed to operate, are not free to buy power from the lowest cost source. Instead they are held hostage to exorbitant prices based upon where they live.
The wholesale price of electricity in the US is something like 3 cents per Kwh. With smart meters there is no justification for not providing consumers with the lowest cost power available, similar to what happened with long distance telephone calls. Consumers should automatically get the lowest rate, or be able to buy from the lowest cost supplier, with the power grid viewed as a public trust, exactly as was done with long distance service. You should not be forced to buy for the power company that put in the power lines in your neighborhood, but from any company on the grid that connects to that power company. The company should only be able to charge you for the power lines, not the power.
Instead consumers are being held hostage via the transmission lines and monopoly pricing. The power companies buy cheap power, then jack up the prices via their monopoly. Something that used to be illegal in the US, under numerous laws, but apparently the Power Commission is above the laws and a force unto itself.
The problem with Anthony’s analogy between time of use electricity pricing and time of use drinking water, is that drinking water can’t be stored for later use At no cost. Electricity is different. If we could affordably store electricity at our homes for hot summer afternoons, then it would likely be even more affordable to store electricity on the grid for later use. Only Hydro pump storage has found a way to do that, But even this technology is expensive. Furthermore, the vast majority of the United States does not have the mountainous terrain required to make pump storage viable.
Our society fostered and electricity system that was dependable, low-cost, and worked for us, not us For it, and that should not be allowed to change.
REPLY: Note who the author of the post is – Anthony
Terms of Reference were agreed at the first meeting of the Green Fiscal Commission on 29 May 2007
It will involve a substantial tax shift, such that, for example, 20 per cent of tax revenues come from green taxes by 2020;
http://www.greenfiscalcommission.org.uk/index.php/site/about/objectives/
make no mistake this has all been planed
WRT hydropower, small-scale hydro may be useful in areas not currently connected to the grid, but other than that, building more of them, like all Greeny schemes makes no sense economically. Without mandates and generous subsidies, in most cases they would not be built, at least here in the US.
A rudimentary knowledge of economics is all that is required to know that raising the cost of energy is enormously detrimental, and yes, even lethal here in the “wealthy” USA. Cooked grannies are just for starters. If allowed to continue, the ultimate result could be world-wide economic collapse, with a death-toll in the millions. I guess there are some who want that.
ONLY $0.92 per Kwh?
Get real and live in the UK. $0.92 sounds less than I pay for the so called cheap rate, or off peak as some suppliers call it.
I think I will move to California.
Willis, the State of California should be able to regulate that 33% of the power generated in the state be renewable. What they should not be able to regulate is that consumer’s in California must buy California power as opposed to Oregon power.
That should be illegal under numerous federal anti-trust and anti-racketeering laws. Every person in California should be free to buy power from the lowest cost producer as they see fit, regardless of which state it is made in, in the same way they are able to buy goods and services from any state, not just those made in California.
This was done with the telephone companies and the price of long distance has now become so cheap as to be effectively free. There are many power companies outside of California that would be very happy to sell power to Californians at a small fraction of what folks in California are paying. With smart meters there is no reason this could not be done, outside of the vested interests of those folks that control the Power Commission and the local Power Utilities.
Thanks Willis,
The fuel poverty deaths in the UK (65/day in winter 2011/2012) are what these B@ur momisugly$T@ur momisugly..Ds are aiming for. It is a great way to get rid of the ‘Useless Eaters’ who are no longer of any use to ‘Society’ (Read don’t make money for corporations or cough-up taxes for the government.) Just kill off the old, poor or crippled and voilà, no looming Social Security problem.
The other method is also seen in the UK is government controlled healthcare. The Liverpool Care Pathway: minister orders report into the use of payments to hospitals for getting terminally ill patients onto a controversial care “pathway” to death. Doctors decide you are going to die anyway so they withdraw not only medicine but food and water to hurry up death to free up hospital beds and save money. Except that there are reports that patients rescued from the Liverpool Care Pathway did not die. link
Some reports say 60,000 patients [were] put on death pathway without being told… Even sick Children [are] placed on controversial ‘death pathway’
And just to make sure you understand this is not by chance. The eugenics movement Britain wants to forget and 01 October 2004: Why is Royal Society hosting a pro-eugenics conference?
These methods of killing off the ‘Useless’ without getting the lily white hands of the politicians dirty will be forever linked in my mind with the Eugenics and Neo-Malthusians.
CAGW and sky high electric rates could be considered a typical political SNAFU until you look at the other policies in the UK. Me, I do not like the Political Class treating me as if I was their
cattlechattel.In attempting to match up solar/wind renewable production with demand, California is building a number of pumped storage facilities in the mountains. But their are not enough sites to allow very many to be built, perhaps half a dozen. The capacity of the largest is around 1000 MW for about 10 hours. They are quite expensive – they don’t cost much less than an actual 1200 MW nuclear plant. Roughly 25 to 30% of power sent to these facilities for storage is lost in the process.
Well, you folks in Kalifornicatia made your own bed. And the nation has elected evil men to inflict suffering even greater pains than those pilgrims who fled Europe to the “free” world. The sheeple never change. All the “blue” cities with their progressive agendas rule. Freedom , liberty and justice are just old fashioned out of date rubbish to the ruling faction.
You want freedom from your power bill, then get off the grid. Make them eat their power bill. Or have a power bill revolt. Do something dramatic that gets their attention. Hurt them in the pocket book.
This is a good post that demonstrates how government really is about regulating and controlling. Logical thinkers are lost in the noise of do-gooder propaganda.
Willis
Can those seeking to restore fiscal sanity, sound stewardship and jobs with justice for the poor work together to achieve that?
See Pointman and his purpose:
Please read Pointman’s critically important post: Working together
Roger Sowell is a chemical engineer turned lawyer who:
As a chemical engineer, Sowell is exposing anthropogenic global warming fallacies by highlighting Dr. Pierre LaTour’s work. e.g. See Chemical Engineer Takes on Global Warming
Sowell is one of the few speaking up for the poor. e.g. see:AB 32 Hits Poor Hardest
Why are you are shooting yourself in the foot by attacking Roger Sowell?
Why win a “battle” and lose the war?
Instead, what ways you can work effectively with Roger’s legal and engineering skills to redress the environmental abuses you work to publicize?
e.g., changing the classification of large dams to “renewable” should provide a major boost in available renewable electricity under AB32 and consequently a reduction in peak electricity prices. Every large hydro supplier would love to sell power at $0.50/kWh instead of $0.05/kWh which would still be strongly below $0.93/kWh.
How can you use your platform at WUWT to get a petition going to put a proposition on the ballot?
e.g., with Roger’s help, launch a petition to reclassify large hydro:
“All sizes of hydropower shall constitute renewable energy under AB32.”
Everyone wanting to reduce their electricity bill should be behind that one.
Lets together win the war, not kill each other to win a battle.
Roger Sowell says: “The seniors that I know also go to great lengths to help each other and share tips on cutting expenses.”
You just don’t get it Mr. Sowell. Here’s Willis’s tip for cutting expenses. Quit trying to save the world from an insignificant (if any at all) temperature rise a century from now and build more electrical capacity using the strategy of finding the cheapest power source available, instead of the most expensive.
And his “tip” will do far, far, more than all of the coupon-clipping tips the seniors share to make their lives more comfortable.
Alternatively, you can screw the productive members of society and use their taxes to alleviate the inevitable pressures on the poor via government programs that build dependency rather than independence among the poor you so generously serve.
You might be attuned to the needs of the poor, and willing and able to help them, sir. But you are very misguided as to the best way to help them. The liberal “plantation” is not just a metaphor; it exists, and is growing daily under present leadership, both in CA and nationwide. And you sir, by defending it’s arrangements, have become one of the overseers regardless of your generous intent and actions.
To be clear, people on my side of the argument don’t want people to starve, or cook. We do, however, object to public policies that obviously increase the need for people to have to depend upon government programs for their survival, as does a policy of limiting the building of plants that would provide inexpensive electricity to all.
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….
There is more to fear, and more ignorance and impracticality shown in this one line than there is in all of Roger Sowell’s sniping and bickering.
But, Roger Sowell, why don’t you simply show where you disagree with Willis’ main point, and explain how price gouging to this degree in the periods of highest energy demand might help the people, the economy and the environment?
A point missed I think.
The state takes from the poor/low middle incomes, via taxes and levees, in order that it can assist the poor to pay the Corporation. Meanwhile the Corporation takes the profits and shares it with its richest friends.
Seems kinda cool and very fair, not
Roger Sowell says: July 5, 2013 at 4:45 am
“.. Nuclear is deadly, dangerous, …..”
What makes you say that? Do you have some data we have not seen?
Here is an alternative viewpoint from someone who sounds like he knows a bit about it :
http://bravenewclimate.com/2012/03/17/economist-nuclear-view-impractical/#comment-154175
Ya know, it is bloody pitiful when you sum up the purported position: (and I paraphrase):
“We are incredibly worried that the excess of anthropogenic CO2 emission is going to destroy the planet, and we MUST ACT NOW to do ANYTHING WE CAN TO SAVE IT, …. except we would like to specifically exclude the use of nuclear or hydro power, because that would be too cheap and easy.”
Dunno why I feel that perhaps short term profits and taxes, and mean green political power may be the main drivers.
Alternate Plan. Southeastern Michigan(not exactly the rocket science capital of the U.S.) uses DTE Energy. I have one meter for the A/C and one meter for the house. We have a progressive rate system so this helps keep the rate down during peak A/C use. The catch is the A/C electrical service is interruptible so they can turn it off 15mins/hr. to balance the load. The air circulation fan is part of the furnace so even when the A/C compressor is off air still circulates, ie. by the time you notice the cooling has stopped the 15 minutes is almost up. Not that big of a deal.
Roger Sowell says:
July 4, 2013 at 10:03 pm
@ur momisugly martha durham on July 4, 2013 at 9:47 pm
“Can anyone explain why hydro is not a renewable in California? Is it because it works?”
Yes, as usual, Mr. Eschenbach has several things confused if not flat wrong.
California DOES count hydroelectric power as renewable, but only for small plants. Large hydroelectric plants do not count as renewable. This was done to encourage building more hydroelectric plants, and it is working. The last I looked, the cutoff was at 30 megaWatts.
Mr. Eschenbach normally censors my comments, so let’s just see if he censors this.
***************************************************************************************************
I have read Roger Sowell’s posts in he past and remember the name as one associated with sensible comments. However, this looks like spoiling for a fight. The last sentence above refers to ‘normally censors my comments’ , but then in subsequent comments he refers to “can’t find THE COMMENT” and eventually gives just the one example. Are there any more, or is this legal training/misdirection kicking in?
Steve T
milodonharlani says: July 4, 2013 at 10:28 pm “Cooking Grandma is probably preferable to her freezing in the dark, as in the bright, satanic windmill-riven UK of today. ”
Oh my, what a great line for a happy student of Blake,
“And did the Countenance Divine,
Shine forth upon our clouded hills?
And was Jerusalem builded here,
Among these dark Satanic Mills?”
More so for this being the Independence Day holiday weekend in FedGov’s US, as I have been promoting “A Song of Peace” http://www.art101.com/peace/peace.mp3 as antidote and anodyne.
Thanks Willis for another great piece. I can’t help but think of the green industry presenting something along the lines of Swift’s ‘A Modest Proposal’, but it isn’t sarcasm.
The powers spent a small fortune replacing windows and doors with double pane glass two years ago.
A Moonbeam type of activity since I experience the same heat and cold as before!
Why?
No changes were made in roof or wall insulation.
When it is very hot or very cold my bill increases as it did before!
“But lots of folks apparently approve of the part where the higher the demand for the electricity, the more the utilities charge for it. ”
In the long run, the supply curve will shift to the right in response to increased demand. Capping supply is the California way, so prices will rise.
The reason that hydro is not a renewable is because of groups like the Sierra Club that went around many years ago saying/showing that damming up a stream or river caused native habitats to be destroyed/altered so that the native species were negatively impacted (I think that it started in the 70’s) and as a result hydro found itself on the way out because coal could easily replace it . Kind of like the issue in CA over irrigating the fields in a particular area that had some sort of a native chub that was in the water that was being used feeding the irrigation system of the fields.
As far as the price of electricity in CA goes, a big reason it is so pricey is because it gets a very large percentage from out of state, Arizona being the largest provider. It also doesn’t help that every other “green” electricity project proposed in CA gets challenged by the environmental groups. Like Willis has shown, if you don’t allow power to be generated in your own state to meet the needs of the population you have to get it from somewhere and when you do you have to pay to get it there.
timc says:
July 5, 2013 at 6:45 am
My two cents says some states have anti gouging laws and high rates in extreme heat would fall under that law for any business except a public utility, why? Because they failed to have enough capacity for their customers when it is all foreseeable mot a really good excuse.
====================================================================
DAFT.
Power plants sitting idle 364 days a year “to have enough capacity for their customers when it is all foreseeable” is massively expensive. Expenses that will be paid by the rate payer ALL YEAR.
Gouge me now, or gouge me later. You will pay, one way or the other.