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7 Comments

  1. Competition is good even when that competition is between private and not-for-profit public companies. And I think there’s a place for both profit motivated energy production and public service motivated Federal, State, and Municipal energy production.
    When private industry saw no profit in supply electricity to rural areas in the South during the Great Depression, the Federal government created the TVA to fill in that niche. The TVA provides electricity for 9 million people in the Tennessee Valley region. I just wish the TVA would completely get out of the fossil fuel energy production business by selling their coal and natural gas power facilities to regional utilities so that the TVA can have more funds to build more nuclear power plants. This would create more jobs and a lot more clean carbon neutral energy.

  2. Hi Rod…wel…you’d get no argument from me on the need for public power. We have tried to municipalize PG&E here for 5 decades but their money is too powerful (paid for by rate payers). The suffered a HUGE defeat when they tried to lie their way into creating a needed “2/3 vote” of the electorate for any kind of public power takeover of investor owned utilities. The initiative went down to defeat last week.
    I’ve worked on public power campaigns in San Francisco for 10 years. Ubonownst to many “Government Run Electricity” (the bogey man PG&E tried to tie to their iniative, and thus the ‘healthcare’ debate) public power entities already are about 15% of the grid, nationally. On average, they charge between 10 and 15% less than comparable private utilities: no dividends to pay, a vastly smaller legal staff, no or little advertizing. There is a national association of Public power entities in the US and they function more or less like any trade group. Public utilities are run more often than not like any large enterprise, sometimes witht he same problems and issues,but almost always accountable to the rate payer *directly* thought their PUCs.
    It is also possible for voters and ratepayers to get publoic companies to inest in things they normally wouldn’t do on a for profit basis.
    David Walters

  3. Rod,
    I am presently working on the Watts Bar Unit 2 completion. Thus I am ver suprised that Exelon has taken such a different approach than TVA, Brown’s Ferry Watts Bar 2 and soon Bellefonte 1.
    Suppressing the supply seems to be the only logocal conclusion.
    Do the ratepayers have any power through their PUC ? What about the decommissioning fund which was funded by the public. Do they have any purse string powers in this area?

  4. Rod, It seems like the private utilities are in the worst of two worlds. They have an monopoly / cartel – granted by the government restricting the players that can supply electricity. But they get to make decisions to benefit their stockholders, who may or may not be their customers. It is a simple principle of free market capitalism that it only works when Government regulates how something can be produced (60 htz, 110 volts, OSAH working standards, EPA environmental standards, etc), but not who can produce it. I have heard of Steel plants who were forbidden from using the excess heat to produce co-generation electric because there was a monopoly on WHO could produce electric. Companies who enjoy this restricted access become like the vendors in an Airport. Prices rise because there is little to no competition. Another part of the problem is the regulation that sets the value of the electric at the rate charged by the highest cost producer. This warps competition, because you are hoping that a company who cannot compete with you is forced to produce high cost electric, your company bottom line is greatly enhanced.
    Changing that regulation to something like a variable rate based on the cost of production would be good. Those who can produce for less would get a slightly higher rate – fixed, but those who are more expensive would get a slightly lower rate. The total costs should be charged so that every power producer needs to pay the cost of waste for the next 1000 years and the cost of clean up as a part of their rate charge.
    Either the government needs to allow greater access to production or regulate the prices and profits of a utility.
    I am a strong free market capitalist, love business, believe it is the best way to help the poor, but I am wary of many business people and recognize how quickly you can be cheated if you are not careful. I am very very wary of business who rent seek the government to either restrict competition or to subsidize directly their product. This always means the consumer gets high prices, and at times poor service.
    Power is a basic need. I agree that we need to work to make it as inexpensive as possible. In fact, if you follow some people’s conclusions, this is the reason for the last few wars – to keep oil inexpensive. I think that is simplistic, but if true it shows the value some understand in having inexpensive power.
    In this case we don’t need to go to war, we just need to invest about 50 cents a watt to produce a product that is very valuable to the rest of the economy. I believe that Gary In. is in the service area of these plants. The economy there has been destroyed as steel has moved out. Cheep electric could revive that industry and that city.

  5. An excellent article on the subject is here:
    http://thetyee.ca/Opinion/2010/05/17/FinancingCleanEnergy/
    This concerns BC Hydro, which the corrupt British Columbia Gov’t is slowing dismantling and selling off to Independant Power Producers. A few quotes:
    …BC Hydro borrows capital at 1 per cent, private power firms pay 12 per cent or more. Campbell chose builders sure to make green power far more expensive…
    …For W.A.C. Bennett, those two facts meant that it was far less expensive for British Columbia’s public sector to build electricity-generating facilities than it was for the private sector. And that view directly led to Bennett’s decision in 1961 to create the British Columbia Hydro and Power Authority..
    …Interest rates in Canada today are at historic lows. And BC Hydro, the province’s publicly-owned utility, is paying an average interest rate of about one per cent per annum on its short-term, revolving borrowings” of $1.691 billion.
    In contrast, many of the independent power producers (IPPs) — the companies that have been directed by Gordon Campbell and his BC Liberal government to build the province’s clean-energy infrastructure — currently pay sky-high interest charges of 12 per cent and more.. ”
    …How much of the cost of electricity from IPPs is for sky-high interest charges? British Columbians may never know, for on April 28 the Campbell-Liberal government unveiled its new Clean Energy Act, which specifically exempts IPP contracts through BC Hydro’s Clean Power Call and Standing Offer Program from review by the B.C. Utilities Commission…

  6. Rod,
    You touch on a several good subjects.
    Specifically about the smart grid and how it is being sold to the rate payers. It is being sold as a cost-effective mechanism of getting more from the current generation and transmission infrastructure instead of just building new generation. All good stuff; doing more with the existing resources we have invested billions into developing and maintaining is a good thing. Personally, though, I am concerned we may end up spending $10 to get $5 back which is always my concern when anyone uses the word

  7. <rant>
    ‘The “Smart Grid”? Naah. “Idiot Savant Grid” is more like it.’
    I dislike having “smart” devices control anything too complex…or too important…as often, “smart” devices are too smart for their own good. For recent examples, see the recent “non-halting” problems with the software of the “drive by wire” Toyota Prius, pun intended – or the South Carolina primary elections where some precincts using computer voting reported more votes for single candidates than total voters. Computers are the solutions to many things – they are fast, cheap, powerful, scalable, and adaptable: however, they are not the solution to everything – as computers are usually not reliable, are incapable of self-adapting, and are almost never resilient or robust. Computers are far less smart than their programmers – even the smartest computer is just an idiot savant – and every programmer worth their paycheck knows this.
    The power grid is a socially-critical system, and therefore implicitly is a life-critical system. You do not want idiot savants in charge of life-critical systems unless the life-critical system can withstand the idiot savant going insane or disappearing (and always at the worst possible moment).
    Any control of critical systems by computing technologies ought to be considered very, very, very carefully and only done when absolutely necessary: it must be thought out well ahead of time, planned in detail, specified intricately, documented completely, programmed precisely, open-sourced (absolutely no software “black boxes”), and tested completely beyond the range of expected circumstances, even in conditions involving very “screwy” failure modes – erroneous or false inter-node communications (byzantine modes) – failures caused by unexpected, complex, or dynamical behavior of the software of a node (dynamical modes) – failures caused by unexpected, complex, or dynamical behavior of other nodes (harmonic modes) – failures caused by load rebalancing due to failure of other nodes (cascading modes) – failures caused by “smart” attempts to cause nodes to fail (hackers, viruses) – brute force attacks on the ability of the “smarts” to perform their functions from unexpected directions (power conditioning problems, ground faults, geomagnetic storms, solar flares, EMI, RFI, to include full-scale high-altitude N-EMP) – etc.
    There should be very simple, hard-coded (ROM-based – no firmware) and hard-wired interlocks constantly checking the “sanity” of the software’s output values; these should disengage the computer from the controlled hardware at the first sign of instability. Life-critical hardware controlled by a computer should be fail-operational; it must perform its intended function at a reasonable level even with the “failsafes” engaged and computer control removed from it.
    This is why you find the front ranks of the movement against fully computerized voting (as opposed to computer counting of optically scanned ballots that are retained – and randomly audit counted – to verify the optical scanner accuracy) occupied mainly by computer scientists, systems administrators, security researchers, information technologists, and programmers, for example. They’re scared of turning our democracy over to computers to count the votes with no backup – they know what this means! Likewise, you should be scared of computers controlling the electrical grid – you should know what this means!
    Lacking sufficiently resilient, robust, fail-operational, field-serviceable, and, fundamentally EXPENSIVE (no outsourcing to third-world countries here) software and hardware – a smart grid is a social collapse – and a national catastrophe – waiting to happen.
    Those who engineer the power grid, build it, operate it, and maintain it ought to be the smarts of the grid – the grid itself ought to be kept as non-complex as possible and as robust as possible to perform its intended function. Humans are – and ought to remain – the smarts of the grid. Humans, though they may have individual smarts that a computer can beat – also naturally have wisdom which no computer can match. Humans – in proper numbers – can naturally work as a team – a multiplied whole far greater than the sum of its parts. And a human system – when properly equipped, sufficiently trained, rightly directed, fairly disciplined, and sufficiently experienced have a much lower failure rate than any computer or network thereof, even if properly debugged.
    Let us not take the chance that our computerized “idiot savant” grid controllers do not turn back into just plain idiots.
    </RANT>

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