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If you save, we will charge you more (lemmy.world)

submitted 7 months ago* (last edited 7 months ago) by mesamunefire@lemmy.world to c/mildlyinfuriating@lemmy.world

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Seen on reddit and other sources:

https://old.reddit.com/r/fresno/comments/1hxqlx7/the_more_i_try_to_save_energy_the_higher_the/

Its already 50c or more per kilowatt hour... https://www.pge.com/assets/pge/docs/account/rate-plans/residential-electric-rate-plan-pricing.pdf

On top of the "The Electric Home Rate Plan includes a $15-per-month Base Services Charge"... because people were starting to get 100% of their power from solar and it was "unfair".

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[-] oyo@lemm.ee 254 points 7 months ago

Privately owned publicly enforced monopolies are rife with conflicts of interest. PG&E should be taken over by the state yesterday.

[-] skip0110@lemm.ee 51 points 7 months ago

There are public utilities in the US. And yes, they offer better service and lower costs than the competing private utilities.

I didn’t know about the benefits until I moved somewhere served by them. I think we would have more of them if people could see the benefits, but unfortunately the utilities you have access to are limited by where you live.

[-] Gradually_Adjusting@lemmy.world 25 points 7 months ago

Very yesterday.

[-] ayyy@sh.itjust.works 8 points 7 months ago* (last edited 7 months ago)

It’s ridiculous that due to some old unique contract the city of San Mateo? Mountain View? (I forget) which is right in the heart of PG$E turf gets to set their own rates and they are less than a quarter of the price, for the same electricity from the same generators and wires. PG$E is such a horrible scam.

[-] AngryCommieKender@lemmy.world 2 points 7 months ago

Which is worse, PG&E or SDG&E? Thankfully my house is all electric and solar powered so I get a refund from SDG&E every quarter for the excess energy I'm producing, so I don't have much experience with them.

[-] irotsoma@lemmy.world 88 points 7 months ago

We took profit for decades from letting our infrastructure decay. Now we still want that same amount of profit, so you have to pay more for us to fix all the problems that should have been fixed with that profit money in the past.

[-] isVeryLoud@lemmy.ca 30 points 7 months ago

And then eventually we'll stop fixing it for that amount of money, pocket the difference and go "tough, pay more" if you want it fixed again.

[-] possiblylinux127@lemmy.zip 2 points 7 months ago

The other issue is the impact renewable energy has on the grid. Most renewables are either on or off instead of having a spinning generator. Rotation of a physical generator adds a lot of stability and makes it easier to sync the phase of the power. With things like solar panels you need to have a station to sync the phases which adds more things to worry about.

[-] irotsoma@lemmy.world 2 points 7 months ago

That is only an issue in very small grids that are entirely renewables in one location. And the impact of AI on the grid has been much more problematic than any renewable sources because it's localized and its is sudden spikes in usage whereas spikes in generation can be mitigated with battery and capacitor tech. Spikes at the usage side need to either be mitigated by the user or the grid has to implement mitigation at just those locations which is more difficult to plan for.

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[-] Wes4Humanity@lemm.ee 29 points 7 months ago

"In order to continue to make the same profit (or more year over year) we charge more per unit when demand goes down... We also charge more when demand goes up... Suck it peasants"

[-] possiblylinux127@lemmy.zip 10 points 7 months ago

It isn't about profit. Its about paying for the infrastructure. It cost a lot of money to maintain the grid. The supply and demand has to meet exactly or the frequently of the power will get out of wack. (AC is hard)

[-] HopeOfTheGunblade 10 points 7 months ago

If they can't afford to maintain it in a changing world, perhaps we should nationalize the infrastructure that we all depend on.

[-] michaelmrose@lemmy.world 2 points 7 months ago

It doesn't say that it says most of their costs are fixed and cost of those large fixed costs are more so amortized per head than per kWh which means higher rates for less usage.

[-] danciestlobster@lemm.ee 2 points 7 months ago

I would be more sympathetic to this if they actually maintained their grid. It's been shown time and time again that the company doesn't replace parts that badly need it while paying their c suite enormous bonuses. I have no sympathy for this situation whatsoever

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[-] thebestaquaman@lemmy.world 27 points 7 months ago

I'm all for eating the rich, but I'm still going to point out why exactly this can make sense.

Let's say you have an energy company that owns a solar farm, you're not looking to turn a profit, just provide clean energy to the world: You produce electricity at effectively zero cost.

However, your solar farm needs to be paid down within its lifetime of ≈30 years, which is independent of energy consumption. So you decide to charge a rate that ensures 1/30th of your production costs are paid back each year, so that you can replace the solar farm after 30 years.

This effectively means you are charging a constant rate for access to energy supply, independent of consumption. This again means that the rate per kWh goes up if average consumption goes down.

Individual customers can still save money by reducing consumption relative to the other customers, but nobody saves money if everyone reduces consumption. This makes complete sense when your "marginal cost" (i.e. the cost of producing energy) is negligible compared to the initial investment of building the power plant, and also applies more or less to nuclear, hydropower, and wind power as well.

Given that this is not an ideal organisation though, I wouldn't put it past them to increase the rate such that it more than offsets the decrease in consumption, thereby increasing their profit. In that case: Fuck them.

I just think we should be aware that our current understanding of energy prices as linked to day-to-day consumption (because the primary expense for a thermal power plant is the cost of fuel), will become outdated as we move to clean energy sources. At some point, we should be paying a near-flat rate for "access to power", rather than a rate for each unit of power consumed.

[-] JohnDClay@sh.itjust.works 5 points 7 months ago

That example breaks down with electricity sources with a fuel cost. But it makes more sense as the grid moves to more energy sources without fuel.

But also, if energy supply is higher than demand on a large grid, they can decrease investments into new solar plants so they fall below the replacement rate from facilities aging out. In your example there's only one solar farm, but in reality there's many being built on a grid at any time.

[-] jj4211@lemmy.world 3 points 7 months ago

I'd say their example is just an oversimplification to keep it understandable. Ultimately fuel based energy has a lot of the same concerns. That natural gas facility costs money to keep viable even if, hypothetically, zero fuel were being burned in some given week. The power lines need repairs, maintenance, upgrades, and expansion over the potential capacity, not actual usage. You have fixed costs alongside the marginal costs. The marginal costs certainly make sense to map directly to usage based rate, but fixed costs are significantly covered by those usage rates as well rather than bumping up the "basic charge" sort of line item on a power bill.

[-] jj4211@lemmy.world 2 points 7 months ago

Seems like in such a case, it should be a different mix of base fixed monthly bill versus usage based rates, to more accurately reflect the cost structure in play.

For example, in my area it's about $15 a month even if you use absolutely no electricity, that's just the base charge ostensibly for the infrastructure required to deliver power, should you want it. It might make sense for this number to be increased rather than raising $/kwh rates.

Suppose the counter would be that at least with the rate increase, folks in more dire circumstances can cut back to avoid the increasing costs (which might be a bit of a feedback loop...)

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[-] nogooduser@lemmy.world 24 points 7 months ago

That’s not really what it’s saying.

It’s saying if they sell less power then the cost per unit of power goes up. This is how all businesses work due to economies of scale. If you sell a lot of stuff then you can sell the stuff for less money and still make more money.

If you personally use less power then that won’t increase your price per unit enough to offset the savings you made by using less power.

[-] reddig33@lemmy.world 11 points 7 months ago* (last edited 7 months ago)

It’s not how all businesses work. Many businesses lower prices when there is a surplus. Consider filling up at the gas station for example.

It’s ridiculous that energy prices would go up when they are spending less on natural gas, coal, or whatever they are using to create the power.

Honestly crap like this is just going to encourage those that can afford it to install solar panels and backup batteries to load up on cheap electricity. Then the power company is really going to throw a hissy.

[-] Bronzebeard@lemm.ee 6 points 7 months ago

The power generation facility itself still has massive overhead costs regardless of how much fuel they are using at any given time.

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[-] morgunkorn@discuss.tchncs.de 6 points 7 months ago

i think the title has the "you" meant in the "you all" sense, if the customers as a whole save energy, the price per unit goes up.

[-] ayyy@sh.itjust.works 18 points 7 months ago

It’s so absurd to me that the Energy Star stickers on appliances at the store say “Estimated based on $.13 per kW/h” and we have to pay around 5x that much.

[-] mesamunefire@lemmy.world 4 points 7 months ago

Yep. And they are talking about more increases this year.

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[-] ZombiFrancis@sh.itjust.works 17 points 7 months ago

My utility company spams me with warnings to reduce consumption to save them money in surge events while also shaming people for being in the top 40th percentile of consumption because they've got all these empty houses not using power to compare to.

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[-] spechter@lemmy.ml 13 points 7 months ago

I thought energy in the U.S. was laughably cheap, but those prices are surprisingly expensive compared to my feel-good-all-hydro-and-wind plan at 0,35€/kWh

[-] IamAnonymous@lemmy.world 6 points 7 months ago

That’s California though, where everything is expensive. In the east coast I paid around $0.20 this summer which includes peak hours. Although it has steadily gone up in the last few years. It used to be $0.12-$0.14.

[-] gramie@lemmy.ca 5 points 7 months ago

They are outrageously expensive compared to my hydro Quebec rate of USD $0.05/kWh, or even my previous rate in Ontario of (varying by the the time of day) USD $0.06-0.12/kWh.

96% of Quebec electricity is generated by hydro power, which of course doesn't require any fuel. The other thing, though, is that power generation and transmission is done through a public corporation, not a private one. The profits go into general government revenue.

[-] HobbitFoot@thelemmy.club 4 points 7 months ago

California has historically high electricity rates.

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[-] Hackworth@lemmy.world 9 points 7 months ago* (last edited 7 months ago)

[-] possiblylinux127@lemmy.zip 8 points 7 months ago

The electric grid needs a minimum amount of people using it.

[-] desktop_user 2 points 7 months ago

Exactly why personal solar energy will hit a tipping point as the rates rise drastically as more users use zero to negative energy. Those that cannot afford solar will suffer, but the Environmental impact will probably be reduced.

[-] Jyek@sh.itjust.works 3 points 7 months ago

Grid attached solar contributes to the overall usage which brings the cost displaced back down. Personal solar is almost always a net positive for the customers, the power company, and the homeowner with the solar. Not to mention the environmental offset that comes with generating your own power.

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[-] possiblylinux127@lemmy.zip 3 points 7 months ago

I don't think it even has much of a impact from a environmental perspective. It is going to be much better to do it at scale.

[-] scarabic@lemmy.world 3 points 7 months ago

Gee it seems like they could come up with a simple algorithm to protect low income people who are conserving.

Aaaand why aren’t costs going down as usage goes down?

[-] CosmicGiraffe@lemmy.world 7 points 7 months ago

Plenty of costs don't depend on how much usage there is. If a tree falls and takes out a power line it cosrs the same whether that line was being used at 1% capacity or 100%

[-] scarabic@lemmy.world 2 points 7 months ago

True, true. Other costs should track with usage though, like fuel. If they had said “when usage falls, costs don’t fall AS MUCH due to fixed costs” then I would totally get it. The way they phrased it makes it sound like costs going down just isn’t a thing that happens. Maybe that’s me.

[-] Ullallulloo@civilloquy.com 4 points 7 months ago* (last edited 7 months ago)

I think it's more like this: Say maintenance of a grid costs $1 million/year, power generation costs another $1 million/year and people use 10 million kWh/yr at 20¢ per. Everything is balanced. Then half the people cut their usage in half. Grid maintenance still costs $1 million/year, generation dropped to $750,000, but revenue dropped to $1.5 million. They have to raise the price 16% to go back to paying for maintenance. You're still saving money if you dropped your usage more than 16%, but those that didn't pay the difference.

Since you generally have to be fairly well-off to afford the massive upfront labor costs involved with solar, its adoption has disproportionately raised the living expenses of the lower class.

The alternative is a base services charge, where everyone pays a flat percentage of the grid maintenance costs and then his or her usage is on top of that. No idea why it's taking this long for PG&E to adopt that model, but adding charges for solar is a big improvement in equity.

[-] scarabic@lemmy.world 2 points 7 months ago

Yeah I’ve got it, some costs are fixed.

[-] possiblylinux127@lemmy.zip 2 points 7 months ago

Fuel is not the biggest cost especially in areas with renewable sources. The machinery that keeps the grid going is very complex and expensive. There are needs to be redundancy and flexibility build it which costs even more.

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this post was submitted on 10 Jan 2025

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