There must be some middle ground that works.
In the 50s or so the infrastructure was created, including power plants etc, it was a profitable venture for the government, so they borrowed against the profits of the energy company, then failed upgrade/update any infrastructure. Add to to that the retirement pensions of all the people which they did not fund and it creates a big problem.
So now as it stands the energy company is in debt ( technically the government owes the energy company money but the government is insolvent ) and they are trying to sell it to a private entity.
Also if you are wondering why anyone would want to get a private pension plan instead of a 401k, well you werent allowed to put your money in a 401k ( same thing happened to the teachers by the way ). It actually very sadto hear the stories of people that worked theur whole life and have nothing to show for it due to the greed of politicians.
> in Norway (...) I could shop around for the best power company
> there shouldn't be a profit motive attached to basic services like electricity
(Like most hospitals in the US, by the way, coming back to the original "There shouldn't be a profit motive attached to basic services like electricity, policing (private prisons), or medicine" comment.)
The 501(c)(3) are the charitable ones, by the way.
"The more generous limit of non-exempt activity permissible to a 501(c)(4) explains why a 501(c)(4) organization may engage in substantial amounts of political campaign intervention activities even though the regulations make clear that such activities do not constitute the promotion of social welfare."
It's less pedantic and more: you can call a fork a spoon all you want, until you have to eat soup with it.
Edit: or maybe you were referring to hospitals? In that case you may be right and I was using the term loosely when I said “most”. There are different kinds of hospitals. My later comments were about ERCOT, not hospitals.
501(c)(3)s are charitable organizations, so “as a charitable organization” was also wrong. But 501(c)(3)s are a subset of 501(c) and thus are also nonprofits, so your implication that they could be a registered charitable organization but not a nonprofit was also wrong.
As a 501(c)(4) they are a nonprofit and not a charitable org; if they were a 501(c)(3) they would be both.
That's impossible in the US; “charitable organizations”—501(c)(3)—are a subset of nonprofits—501(c).
It's the same for the grid in Sweden (Svenska kraftnät), also how optic fiber is deployed here in Stockholm, the costly infrastructure was developed and is maintained by the government, private ISPs can lease out capacity but aren't the ones maintaining it. That avoided the costly deployment of multiple similar infrastructure per provider like you see in the US, where corporations cornered some markets and made the barrier of entry so costly that they became de facto monopolies.
> there shouldn't be a profit motive attached to basic services like electricity
The failures of what the US calls "regulation" is shown by California (where decades of under-investing in both modernization and upkeep has led to countless deadly fires) and the Texas clusterf..k.
In the almost 30 years I've lived in Germany and a bit of Croatia, the only time I can remember I lost power without actively causing it myself by careless drilling was the Nov 2006 europe-wide blackout.
Assuming people are corrupt and greedy and then working backwards from that point imho is the best approach, and that often times means giving people less control over our lives.
If, say, every county it serves owns a share of the company, you set up a structure in which it isn't supposed to generate a profit: shareholders can't run it into the ground for monetary reasons. On the other hand, being independent from the government itself makes it less vulnerable to corruption and harmful interference.
The system works very well overall, avoiding both extremes of full government and full private. My rates are reasonable and I've very rarely had outages of anything over decades.
Edit. Cable is the exception. They are a PUC approved monopoly or duopoly with intensely abusive customer experience, in most places.
You can (and should honestly, if you're liberal) have privately owned power generation, but the infrastructure and network? Its a bad idea. Private road, private rail, private lines... The same way, you can have water extraction and cleaning privately owned (and some say you should), but its dangerous to let private sector run the water infrastructure.
And also, if any power generation company is caught lobbying against public infrastructure funding or nuclear power plant funding, kill them. force sell or something. You can't have private owners with skin in the game lobbying public spending.
Or took the different and invested it in the cost of solar panels and a battery. We’re taking about almost $100 a month difference.
what about food, shelter, and clothing? Those are all privatized and arguably more important than electricity or medicine.
Also the `whataboutism` isn't productive. There's a clear need for regulation.
The customers shouldn't have to foot the bill for the companies lack of investment in their own infrastructure even after 11 years ago it was advised they had to winterize..
Also customers don't have the choice to choose an 'on-the-grid' supplier.. So ?
Not sure where this notion that government will deliver services in a more efficient ways come from. As the poster above said, there needs to be middle ground.
All the countries where governments deliver healthcare and it is significantly more efficient than the US system?
On the other hand, commercial aviation has become unprecedently safe, so it is not like the FAA is making a mess of things in general. Nevertheless, the 737 Max debacle has revealed an unhealthy level of regulatory capture.
The thing I am concerned about is masking market forces from consumers. Potential "band-aid" solutions for the current approach might include adding a capacity market, or requiring that all consumers operate on a variable rate plan in order to more fairly mediate demand vs supply. Customers with fixed rate plans in Texas had no incentive to not run things like electric clothes dryers or resistive pool heaters while others were literally freezing to death.
If you think about fundamentals of consumer behavior and markets, a fixed rate electric plan is like buying an insurance policy or options contract on some underlying security. If you have a lot of derivatives in play, bad things almost always happen regardless of the underlying asset types.
I mean, I agree variable rates could stop people running clothes dryers, close down industrial users and so on. But the remaining demand would be extremely price-inelastic; How much would you pay to stop your pipes bursting? $3000? $10,000? More?
So long as the amount of power being generated is less than the amount of power needed to prevent anyone's pipes freezing someone's pipes are going to freeze, and no amount of shuffling around who gets the power is going to change that fact.
That said, I think the higher order effects of a market regulated to require more responsive rates could lower this threshold.
For instance, if every homeowner in texas might get stuck with an expensive winter heating bill because of new regulations around rates, we would consider requiring all new construction use gas furnaces where possible.
As it currently stands, I was just talking to a friend who got taken to the cleaners because his brand new construction uses resistive/heat pump for heating, despite the trivial & cheap availability of natural gas.
If rates are predictable enough that a gas furnace is sure to pay for itself over the next 10 years, people will easily identify it as a good investment.
On the other hand, if the rates are variable, switching to gas is a gamble. Might save me loads of money, might not save a dime.
You can search for the minutes of the public utility commission’s decisions on budgets. They micromanage down to costs of replacing fences around facilities.
The result is a massive cluster fuck that has killed dozens in the state.
I'm pro capitalism, I think companies work better when there's a profit to be made and I also believe the state should hold a share in what is called "natural monopoly" to keep things on track if it's necessary.
Until we fix the government corruption I can’t get on the free healthcare for all train. I already pay nearly 50% of my income in taxes with little to no short or mid term benefit. Jacking that up even more for basic health coverage doesn’t feel worth it.
If you’re wondering what I mean by corruption, just look at the latest Covid bill that sends billions to other countries and sneaks in random bullshit about internet streaming...into a pandemic relief bill. This isn’t a your side vs my side issue. It’s all bad. They’re all corrupt.
...I am curious as to the math behind that. The highest federal income tax bracket in the US is 37%. Only income over $523,601 (as of 2021) is taxed at that rate.
Not sure about "over 50%" but "nearly 50%" could be "over 40%".
Also it’s not technically income, but there’s also cap gains tax that I pay almost every year.
All in all, Americans pay an insanely high tax for what we get. Our tax dollars go to corrupt politicians that use the money on foreign aid and starting wars, defense contractors and military. It’s disgusting.
Anyone who invents a cure for cancer deserves to be paid handsomely imo.
What makes it more "fun" (nothing funny about the ordeal and the deaths in Texas)(btw I've been in Texas many many times - wonderful place, great people!) is that Texans are very conservative on one hand, and very pro-super-aggressive-capitalism on the other hand. Which makes no sense.
Seth Meyers said something on his show a couple nights ago: if you tell the antilopes that they are free to wander around in the zoo, it is only fair to tell them that the lions will ALSO be free to wander around in the same zoo.
Seeing this from Europe, I find it brutally ironic when people lose "free" to a corporation (weather reports, software to do your taxes, etc.) You (citizens of the USA) can do 10 things wrong to get yourselves to this predicament, and you take these 10 steps with acrobatic accuracy.
Sell a terrible car and people buy a different product, but when you have local monopolies like rural hospitals you always run into issues.
With Texas electricity markets you make more money if everyone is generating 1/2 power in an emergency when the market hits it’s legal maximum. That set’s up very poor incentives. It all comes down to this: ERCOT can be more susceptible to wholesale price spikes because it does not have a capacity market, which pays power plants to be on standby during peak demand and weather emergencies, for example. ERCOT’s model means consumers are not paying for generation that may never be called into action. https://www.reuters.com/article/us-electricity-texas-prices-...
PS: It’s an often reported lie that the price was set by regulators, they set a limit well before the storm and the market I created the price to 9$/kWh and then was capped by that limit. If sufficient generation was online the wholesale price would have remained anything below that 9$.
The per-megawatt hour prices might be higher, but is there evidence that overall revenue is higher? I understand that supply is down as well, so overall revenues might be worse or equal to normal levels. Furthermore, people in yesterday's griddy thread mentioned that currently the price is fixed at $9/MGWh by state regulators, which isn't exactly a free market.
Seems to be a price floor and/or set price.
> Texas’ Public Utility Commission, appointed by Abbott, raised the wholesale market price of electricity to $9 per kilo-watt hour — a 7,400% increase over the average 12 cents per kilo-watt hour — in response to rising demand. The hope was power generators would be enticed to produce more electricity.
“Last week, the price shot up to the legal maximum, set by the Public Utility Commission of Texas (PUCT), of $9 per kilowatt hour.” https://krdo.com/news/national-world/2021/02/24/how-texass-d...
It’s the market that chose that price, with sufficient generation is would have stayed at normal rates.
This seems to be contradicted by another source:
>The PUC met Feb. 15 to address the pricing issue and decided to order ERCOT to set prices administratively at the $9,000/MWh systemwide offer cap during the emergency.
>"At various times today (Feb. 15), energy prices across the system have been as low as approximately $1,200[/MWh]," the order states. "The Commission believes this outcome is inconsistent with the fundamental design of the ERCOT market. Energy prices should reflect scarcity of the supply. If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest."
https://www.spglobal.com/platts/en/market-insights/latest-ne...
The key thing to note is that in the second paragraph, the utility commission thought the free floating price of $1200 was too low, and bumped it up to $9000 to "reflect scarcity of the supply".
What your referencing is points in the day when the price fell because rolling blackouts where intentionally created. “If customer load is being shed, scarcity is at its maximum, and the market price for the energy needed to serve that load should also be at its highest.” That’s saying if rolling blackouts are implemented then the price should be at the limit. Grid operators can’t simply turn off more people’s power to reduce the demand arbitrarily below the limit. So, prices where adjusted retroactively.
As to why that’s relevant, Grid operators are stuck with the bill. If they can maintain normal prices by simply cutting off everyone’s power to avoid losing billions that’s what their going to do. But, the are not allowed to arbitrarily cut people’s power because they dislike the current wholesale rates.
Again, choice was made about this storm, just enforcement of existing rules.
They where producing less lower but not 50 / 9000 aka 0.56% as much power. That’s how a few people where getting 10k bills for a week spike. Also, prices where capped by regulators, they would have spiked well past 9k/MWh without that regulation. In the long term customers pick up the bill while power generator who generated any power end up making bank.
I.e. generators, who are well prepared for the adverse conditions, finally got paid for their investment?
Not true.
Early in the crisis so much generation capacity went offline that there was no way that that it could meet all of the price-insensitive demand (most consumers pay a fixed price, regardless of wholesale prices). If you attempt to run the grid when demand exceeds supply it will damage generators, making the problem worse. To avoid that, regulators shut off power to people who still had a working connection to the grid and would have been happy to consume power at their contracted rates.
As generation came back online, prices dropped quite low because demand was artificially constrained. The regulators then overrode the market and set the price to the maximum allowed by the system to encourage all generators to come online, which would then allow them to start turning people's power back on.
As rolling blackouts where implemented by people paying wholesale rates they obviously have an incentive for excessive blackouts. Regulators said, you can only have rolling blackouts while rates are near the maximum because otherwise you’re simply going to keep cutting people’s power off to save yourself money.
Granted, outside of context it seems like really odd behavior. But again this was retroactively filling in periods where prices dropped artificially rather than proactively increasing the prices. It’s no different than the SEC stepping in when someone manipulates a financial market.
PS: That said some of this was simply technical as blackouts aren’t capable of the kind of fine grained second by second control needed to maintain a stable electric grid.
Again, no. The cap was in place before the floor, but was never binding: they did blackouts before the price hit the maximum, not after.
> As rolling blackouts where implemented by people paying wholesale rates they obviously have an incentive for excessive blackouts
The decision to do blackouts was made by ERCOT, not by transmission operators or power retailers. (Retailers are the only ones who have an incentive to do blackouts, though transmitters generally also have a retail operation.)
As utilizes are required to sell at contracted prices to the general public and must buy from insufficient supply that’s the situation. Actually breaking equipment isn’t needed to demonstrate this. If you’re doing rolling blackouts from insufficient supply then your at price infinity or whatever price limit is setup to protect you.
I am using utilities rather than TDU’s as while they are required to provide access to others, enough do both to make the distinction meaningless in this instance.
PS: ERCOT making that decision is only relevant if it could have been avoided. So, if you can find someone saying their was sufficient supply to cover demand then I will withdraw my argument.
The goal of “basic services” should never be cheap, but good instead (i.e. quality, not price). And that is what should be regulated (e.g. metrics like “health outcomes” in medicine, “number of blackouts” in power distribution, ...).
Then, the market should take over, to optimise for price (== profit), because that also optimises for social well-being (e.g. in medicine, “cheaper” directly leads to “more affordable healthcare” and indirectly to “healthier population”). The idea that “profit” shouldn’t be optimised or that the government should take over is obviously misguided, because there is no guarantee or reason why the government would maintain quality if the free market cannot (instead of “profit” they would optimise for “employment” or “corruption” or “size of bureaucracy”).
The problem with that is that it's far more attractive for a private entity to book profits, instead of investing into their infrastructure.
Thinking about it, the Texas disaster seems to be quite a nice illustration of that.
Without the proper metrics, there’s no guarantee that the government will invest in infrastructure either (instead of, say, corruption - paying outrageous amounts of money to friends&family for subpar service).