Redstate

Feeding power back into the grid has safety issues. It makes it difficult for the utility to regulate power flow or cutoff power to lines during repairs. Many localities require customers with generators to disconnect from the grid while generating power. Check with your local government/utility before connecting a power source to the grid.

With a diesel generator ?

Theres a very good reason you hook your house up to the grid. Its Cheaper!!!

Its the same reason people don't try and run their homes off of giant loads of D cells.

If your running solar its a different story. The cost to generate is nothing but you are paying off amortized capitol costs. Many utilities let you trade 1 for 1

First there is the amount of energy it takes to build and maintain energy production equipment. Someone has to make it, and that takes energy. Rooftop solar generation is fine if you have no trees around the house, and the (energy+economic) cost of the equipment can be amortized over the life of the equipment. Most people who install the equipment eventually use it as shade for their roof, which at least extends the life of the roof.

I feel as if I'm making a straw man argument, but solar generation is the best possible scenario for Gore's Fantasy. Anything that requires moving parts or transportation of fuel is DOA.

It's all based on seeing energy consumption and "pollution" in religious terms, rather than in simple economic or practical ones. The deciding argument is always, "And it's good for the planet."

Don't get me wrong: I hate litter, and I actually live a fairly green lifestyle (except for driving 130 miles/day). We compost, recycle, and end up landfilling almost nothing. I'm a fanatic about repairing something instead of buying a new one. I just don't worship at the altar of Mother Earth.

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There be one Cap'n here, it it ain't you.

The power companies are already being forced to buy any excess power you generate (at least in some states). Of course, any method you use to generate power will still put you far into the red, from the capital and operating costs and the maintenance, but some people just like solar cells and wind turbines enough that they don't care.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

The economics of solar panels are still scary bad, even when used in the south. It is questionable whether they ever pay for themselves, much less deliver any kind of return on investment for the massive upfront cost.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

We use solar panels up north in Minnesota since we are not on any grid whatsoever. There, they make sense; but elsewhere, the low enery levels produced are not economical or even practical when considering the energy needs of a normal home. Wind power is better, but you still have to buy (and replace) numerous batteries to store the energy unless you can sell it onto the existing power grid. States that let you sell excess generated power back to the grid can make wind energy pay for itself, but it takes years to cover the initial investment.

It is a capital mistake to theorize before one has data. Insensibly, one begins to twist facts to suit theories instead of theories to fit facts - Sherlock Holmes

I have a diesel generator that I'd like to sell you, so you can feed electricity back into the grid and make money under Al Gore's Inconvenient Plan. I also have a set of solar tiles for your roof that will cost you twice as much over the life of your home as using grid electricity -- at least until Algore's plan takes effect. You can contact me at 1-800-PORHOUS

the power from your roof solar collector does go back into the grid, but you only get credit for what you use from the grid. For example, if you use 10 KWh from the grid, and generate 12 KWh, you don't get any money back. So that clips the amortization a bit.

But I'd take a diesel generator. Every time I see one at an auction it goes for very nearly retail. (My rule for auctions is to pay no more than 10% of retail).

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There be one Cap'n here, it it ain't you.

I don't want to give you a raw deal. Sure, I can sell you a diesel generator at low, low prices. But you're going to have to pay for the diesel fuel, which if Algore has his way will have an increased tax on it, just like gasoline. That plus the maintenance and the shipping and installation plus whatever pollution controls you'll have to put on it means that you will probably arrive at a loss. And I don't do things like that to my friends. :)

Actually a number of states have net metering laws. It varies from state to state of course, but basically you get credit if you overproduce for a month and can use that credit if you underproduce. At the end of the year, the utilities pay you for any net excess energy but at a reduced rate from what they charge. Most of the laws only apply to alternative energy sources such as wind or solar. Here are state by state alternative energy regulations http://www.dsireusa.org/ .

CRSWatch addresses the "critically well-received documentary" snark by showing that the movie was, in fact, critically well-received and, in fact, did very well at the box office and... you offer to sell him a generator? Not only does that not address the point at all, it doesn't even make any sense.

by the usual nutcase suspects and the fact that there are enough idiots to generate $23 million in sales is just another failure of the Left's abortion on demand position.

Al Gore is a very sick man. He actually lost his mind over losing to GWB and appears no more rational to normal people than do the countless homeless people wandering the streets talking to imaginary friends.

Envisioning when all that is Left is the Right.

"Al Gore is a very sick man. He actually lost his mind over losing to GWB and appears no more rational to normal people than do the countless homeless people wandering the streets talking to imaginary friends."

I guess it depends on how you are defining "normal." If by other Redstate posters then you are most likely correct, but if you mean the "man on the street" american I don't think you are correct. Consider the following (look specifically at global warming):

Fox:
The new national poll finds that 77 percent of Americans believe global warming is happening and, of those, more than twice as many think it is caused by human behavior (46 percent) than by normal climate patterns (17 percent). About a third says it is a combination of both (30 percent).

http://www.foxnews.com/story/0,2933,175070,00.html

Time:
85% believe that Global warming is happening, 80% believe humans are part or total of the reason (not a direct quote this is my summation based on their graphics).

http://www.time.com/time/magazine/article/0,9171,1176975,00.html

ABC:
Nearly six in 10 Americans think global warming likely is under way and as many accept that human activities play a significant role. But — like the Bush administration — most part company with scientists' calls for prompt government action.

That lack of urgency stems from perceptions of the hazard: While a vast majority, nearly eight in 10, believe global warming will pose a serious threat to future generations, far fewer — just one-third — think it will affect their own lives. The majority who see the risk as a distant one overwhelmingly prefer more study to immediate action.

http://abcnews.go.com/Technology/PollVault/story?id=850438

Harris Interactive:
Almost three-quarters of the public believes in the theory of global warming – that the world is getting warmer -- and only one person in every ten say they have not seen, heard or read about global warming. Furthermore almost half of the public (46%) thinks that global warming should be treated as a "very serious problem" and only 13% think it is not a serious problem.

http://www.harrisinteractive.com/harris_poll/index.asp?PID=108

Now it might be fair to say that the average American does not agree entirely with Mr. Gore. It does not (based on this issue) look like "normal" people think Al Gore is the equivilent of a hobo who mutters to invisible friends.

He wasn't saying that you should believe in global warming because of polls.

He was saying that Al Gore is not outside the mainstream or "appears no more rational to normal people than do the countless homeless people wandering the streets talking to imaginary friends" by showing that several major polls indicate mainstream opinion agrees with Al Gore.

He has issues that go far beyond that. That is what was being alluded to. Remember his conduct during the 2000 campaign and debates? That could hardly be called "normal" by any stretch of the imagination.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

He must have done a good job of hiding his lack of "normal" from the 51 million people that voted for him.

Almost 5 million of those think it is very likely the government was behind 9/11. You know the saying... there's one born every minute.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

Are you sure all of those 5 million are left-wing crazies? You act like there aren't any crazies on your side.

I was being generous in figuring that 2/3 of those crazies wouldn't be voting anyway because of paranoia about the CIA tracking them down and sending them to be tortured in some secret prison with the help of the Diebold machines.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

we had them all killed.

Envisioning when all that is Left is the Right.

Here's a poll from c.1492: Everyone thought the earth was flat. Turns out they were wrong. Science trumped belief once again.

http://blog.nam.org/archives/2006/08/zogby_poll.php

how many people thought Pluto was a planet?

Then a group of astrologers astronomers decided that it wasn't ... by voting on it.

Scientists are as political as any other group.

--
There be one Cap'n here.

It’s dead easy to find a non-random sample, and get results sure to elevate your eyebrows. Rob McConnell, who hosts a radio show called "The X Zone," recently did Internet surveys on two questions: do you believe in ghosts, and did American astronauts really walk on the moon. To the first question, 77% of the respondents said yes, and to the second (to which an astounding 19 thousand people replied) 93% said no!

[Source]

What, internet polling is unreliable? Someone call the internets!

The polls that CSRWatch posted were done by major polling operations that use specific techniques to ensure that the results are generally representative of actual public opinion. Ya, they might be off by a few percent, but comparing them to internet polling is absurd.

They are all over the map from one poll, to the next. So clearly they cannot all be within a few percent. They might as well have used a random number generator to come up with the results, because that sampling of polls is about as consistent.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

I think that's a bit much.

Ya, there is a big spread there, but you can't escape the fact that all the polls show the majority of people believe in global warming. Which was the point that CSRwatch was making.

What next ? Science by propaganda machine ?
While we are at it we can legislate pi to be 3.14 and repeal the laws of thermodynamics..

But a recent poll shows that the public believes pi to be 3.1415, so you're outta luck.....

...But at the end of the day, it doesn't matter when you poll on science. What these polls show is that people believe the bombardment of stuff they're getting from the MSM, nothing more. Remember 30 years ago they believed the globe was cooling -- for the same reason. It's not reliable to poll on matters of science, period.

People also thought DDT needed to be banned worldwide after reading Silent Spring. How many tens of millions died from malaria (and continue to die to this day) as a direct result? In the final analysis, none of that matters to the environmentalists. It's all just collateral damage. The same goes for the inevitable economic damage caused by carbon caps, taxes and the like.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

People knew the earth was a sphere from the Ancient Greeks (I believe Archimedes... I could be wrong). Columbus was trying to find a trade route, not prove a scientific theory.

creating fear and trying to obtain money and power with his enviro-scams. A modern age equivalent of an elixir salesman.

Si vis Pacem, Para Bellum

you would understand how little I think of your polls. And, please take a class in reading comp. I never said Algore was a hobo. I said he was crazy. I said normal people recognize this because it is obvious. Do you think Algore is sane?

Envisioning when all that is Left is the Right.

As for consensus on anthropogenic globa warming, yeah there really is one among scientists. Granted the National Association of Manufaturers (your link) may disagree but as they clearly have a stake in the answer being "no" they really aren't a good resource to use.

And the scientists that get their funding from think tanks that are looking for the latest thing to scare the public with don't clearly have a stake in the answer being "yes"?

See, I can knock down your references just as easily. Have you read _The Skeptical Environmentalist_? There's someone who gave up the kool-aid and has been harassed endlessly for it.

Come back when you can explain why Greenland got its name when it's covered in ice now.

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Internet member since 1987
Member of the Surreality-Based Community

Wow, the National Academy of Sciences is a think-tank funded, public-scaring, kool-aid drinking group now? Along with the national science academies of the other G8 nations and Brazil, China and India?

http://www.royalsoc.ac.uk/document.asp?latest=1&id=3222

I find it hilarious that, given the information above, someone is willing to hold up a blog entry (that he wrote!) from the National Association of Manufacturers as a counter-argument and proudly declare "there is no consensus!"

But look at the links in that entry. It's chuck a block with links to scientists who don't buy into the global warming hysteria. You'd have to agree there's no consensus, wouldn't you? Only trying to present the other side, which is not inconsequential.

The article says nothing about how much capital it cost to construct this house to be able to sell back electricty. I can assure you that if Jimmy Carter and HH built me a house for free, as part of a nuclear power plant, I would be selling back millions of dollars in power.

I would like to put up a wind turbine machine, but my neighbor Teddy "buy me a drink" Kennedy won't let me. Can you get Algore, the NetGrid Wizard, to have a word with him for me?

Envisioning when all that is Left is the Right.

When are we going to start seeing nuclear reactors incorporated into Habitat homes? Where's Jimmah Carter when we need him?
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

OK, so the cost of the house with all the energy efficient systems was about 8% more per square foot to build than a similar non-zero energy house. The cost of a house in this neighborhood about the same size is roughly $250K, so that would an additional $20K.

The cost of energy is about $0.07/kWh and the home uses about 400 kWh per month. And they are generating an average of 200 kWh per month in excess. So that means that they are putting about $42 per month back into the initial cost of the system before tax breaks. The payback period is then ~40 years - assuming energy prices remained fixed (likely?). The system is designed for 30 years (including a spare inverter), so yes, not quite economical. But, currently the total tax breaks on the system are about $8K, so it is economical for the owner. Whether it is economical as a whole is debatable, but remember every energy source has it share of tax breaks, so it's not exactly easy to do the comparison.

Also note that the demand for solar cells is currently much higher than the supply - I think most manufacturers are sold out for the next 28 months, so the price will likely decrease in the future, once it's in balance.

If you live in a windy place and and your neighboors let you can install a similar size wind system for only about $12K, which is even more economical.

But, again that's not really the issue. The issue is whether the electricity market should be open to small producers. There are many advantages to doing this, why shouldn't it? If systems are truly not economical, the market will decide. You folks are conservatives aren't you?

200kWh at 7c per kWh is $14, not $42. That would put the payoff at 119 years, which you can bet, is about 5 times longer than those solar panels will function. That is figuring a 0% return, so even if they were guaranteed to last 119 years with no repairs or maintenance, they would still be a very bad investment.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

200(excess)+400(consumed) = 600*0.07 = 42...uh, still 40 years, nice try though...

Still, 42 years is hardly an argument in favor of it. Even a payback time of half that isn't worth it. They'd have to get the payback time down to 10 years before it would really start to make economic sense.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

a tax break of $8K the payoff period is 25 years, meaning 5 years of no energy bills and an $14 per month for lunch...not too shaby. And if the system were in California with energy prices at $0.14 per kWh, sounds like even you might be a buyer...

You do ROI like Amazon.com. Interest lost on the $12,000 invested capital at a double tax free muni rate of 6% is $720.00 per year or $60.00 per month. If you can't make a Return On Investment, you can't generate a Return Of Investment.

Envisioning when all that is Left is the Right.

How quickly will energy prices rise in the future? The inflation component alone will be 3%, right? And natural gas prices will be constant? Not! But guess what, I'm not here to convince you to buy a system...I'm here to say that there are instances where people generate more than they need and should be allowed to sell it to other people who want to buy it...what do you think?

I'm here to say that there are instances where people generate more than they need and should be allowed to sell it to other people who want to buy it...what do you think?

Right now that is being subsidized by electric rates. We could break that out entirely, but the result will be that people who don't use much electricity will pay a much higher electric bill, while those who do use a lot will see their bill drop. The maintenance costs of all those wires, from 800kv interstate lines to the ones on the pole outside your house is a significant portion of your KWh charge.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

so include transmission in the price that you sell. If it's a fixed price per kWh, I don't see how people that generate would pay more. Internet companies have to pay for internet access based on bandwidth. I don't see a problem there, except it will reduce the profit.

That's why the homeowner will only get the 3.5c/kWh, or whatever the number is, instead of the retail price for his energy. If you force the companies to buy it at full price, that money is going to come from somewhere else... like higher rates or base charges on everybody else. Long term, it probably makes sense to separate out transmission costs entirely, but that would be painful for a lot of people. You would probably end up with an electric bill with a base charge of 40 bucks a month before you use a single kWh.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

The problem with your calculation is that the Utility won't pay you thr residential rate for the excess electricity you produce. If you are paying $0.07/ kwh, that figure includes charges for the generation costs plus the transmission and distribution costs for the utility plus their profit. They will typically only pay you the avoided costs for generation, unless local regulations require them to pay you more. (After all, why should they pay you for maintaining their distribution network)Generation costs for nuclear power are currently running around $0.02/kwh for existing plants. Therefore your pay back calculation looks more like:

400 kwh x $0.07 (avoided costs)= $28/ month
200 kwh x $0.02 (revenue) = $ 4/month
Total $32/month

If you could finance this at 6% interest, the interest alone on
$20000 is $100. Given that your revenue can't cover the interest alone, your payback period is infinite. This is the real reason that you don't see a market for residential generated electricity. It isn't economical. trust me, given the cost of building new generation, if you could produce electricity in bulk amounts cheaper than the utility, they would be glad to buy it from you rather than investing capital in building new plants.

...don't modify your house with such a system. But, how about letting those of us who have such a system (for various reasons with economic becoming more viable in the future) and choose to sell their excess power to others who want to buy it? Power companies already give cheaper rates to people who let their AC be turned off during high demand times (like when it's sunny and solar panels are working) - so more people with their own power is benificial to them, isn't it?

Is $0.02/kWh the actual total cost for the producer - if so how come nobody in the country is paying less than $0.07?

I think you need to read my whole response before you ask questions that were already answered. The $0.02 per kwh I quoted was only the generation component (and typical for existing nuclear units). I pointed out that the residential rate included other charges such as maintenance of the transmission grid, administrative expenses and profit for the utility. Obviously the utility isn't going to pay anyone more than the avoided generation cost. As far as why you can't sell your excess power, you need to check your existing state regulations. In many states, you can sell your excess electricity back to the utility. Just don't expect to break even for a very long time if ever.

there are also other avoided costs like waste disposal, which is going to be higher for nuclear fuel than old solar panels/wind turbines.

Maybe one won't break even economically in the near future, but there are other factors why people would want to buy and sell energy at non-ecomonic prices e.g. 60,000 Excel costumers pay extra (unless gas prices increase and wind is cheaper) every month for wind energy.

Yes, I know about net meetering - my state does not have it - they have other incentives. In some windy states (i.e. North Dakota), the payback period for a wind turbine is about 8 years.

Generation costs, zero. Maintenance and amortisation of the infrastructure, pretty much all the costs.

Quentin Langley
Editor of http://www.quentinlangley.net

I tend to think in terms total cost of energy, where nuclear is definitely not the cheapest because of large capital costs. I guess that's what I was try to say - the big picture is that the total cycle cost of a small solar producer might be competitive with a large nuclear facility, with the competitiveness growing with time...e.g. commercial wind power was $0.40kWh 20 years ago and is now close to $0.04/kWh...

I call BS when someone tries make a specious economic argument. If they said said Alternative energy is a good idea for backup/self sufficiency, fine. Just don't tell me HH builds a house and all the energy is free.

Envisioning when all that is Left is the Right.

Actually, you have stated quite emphatically that you don't believe in economic arguments at all:

http://www.redstate.com/story/2006/7/30/74645/7219#comment-18467

Could you perhaps frame your argument as a spiritual one? Perhaps something along the lines of "only baptists could sell power to the grid"?

Pull them pants back up, Mr. Tbone.

Envisioning when people's belief systems are consistent.

You may think what you said was defensible (using Tbone's past general statements to counter his specific argument here), but I do not.

Further, charging that his general statement (that all problems are spiritual rather than economic) implies that he believes only a specific denomination should have economic rights is quite absurd.

If you had stopped there, I would ask you simply to defend that silliness to build a reasoned position.

But telling him to "pull them pants back up" is simply a non sequitur insult with no place at this site.

Likewise, mocking his signature and implying that his belief system (or anyone else's) is inconsistent has no place here.

--
Evil men hide from the truth, but good men stand upon it.

before you make assumptions about what, exactly, you are defending.

In that thread, he *ridicules* others for trying to "build a reasoned position" through an economic argument - and in this thread starts one screed asking whether the parent can spell... guess what word?

As for "pulling them pants back up", yes, it was perhaps delivered maliciously, but it is actually nothing more than an allusion to the expression "being caught with one's pants down", which I rather think the subject has been.

Maintaining an atmosphere of civility is a wonderful ideal to uphold; doing so unevenly is not.

He was simply referring to economics not being the root cause of terrorism, or an effective strategy for combating it. Many people here (including myself) would agree with that position. In any case, that has nothing to do with this thread. It also doesn't give you the right to throw out insults.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

as if you understood them to mean something they don't.

In that thread, he *ridicules* others for trying to "build a reasoned position" through an economic argument - and in this thread starts one screed asking whether the parent can spell... guess what word?

I did read the thread. I read just about everything that gets posted here. I also looked at your posting history. I understood your reference to "caught with pants down", but it didn't fit the context and the phrasing seemed scurrilous.

He didn't ridicule anyone. He said their argument was specious, which it was.

He didn't start a "screed" (meaning a rant, tirade, or harangue full of illogic and misstatement of fact).

If you took exception, you should have said so instead of attacking him personally. If you want to keep the rhetorical and moral high ground (as you say you do), you have to stay on it.

--
Evil men hide from the truth, but good men stand upon it.

He never seems to miss an opportunity to add something "inciteful" to a dust up like this.

In Vino Veritas

Hangin' with my redneck friends. I appreciate my defenders though I know they would have enjoyed more of a challenge.

Envisioning when all that is Left is the Right.

If you want to get technical then get technical. What he said was that the world's problems were spiritual. Such a statement nothing to do with not believing in economic arguments. I may think that Star Trek is superficial and all the worlds problems are political in nature. But that doesn't mean I can't present the case of "Janeway > Kirk".

absentee

Quentin Langley
Editor of http://www.quentinlangley.net

absentee

Janeway would have been nothing without Seven.

Now Pike, there was a Captain.

--
Evil men hide from the truth, but good men stand upon it.

Pike would be, if I may borrow the vernacular, pwned by his predecessor, Archer, as well as his replacement, Kirk. Janeway ruled.

absentee

I will have to admit that you are a pretty good kisser.

Envisioning when all that is Left is the Right.

We're automatically against any idea from Al Gore (Creator of the Internet, abortion flip-flopper, Doctor of Electioneering, and Chicken Little Laureate of the Kookosphere)

--
There be one Cap'n here.

That's what generators are for. I certainly wouldn't want to be depending on solar cells or a turbine for my power if I was disconnected from the grid for a week.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

I didn't say wind turbines was ONLY for backup and there weren't ANY other benefits and that people didn't also have generators.

What is also nice about a wind turbine is that you can roll the cost up into your mortgage when you are building a house, so you can spread the cost of it over a long period of time and the variable cost of energy doesn't affect you as much.

When it is really windy (most of the time in my area), you generate excess energy and put it on the grid. Your energy credit builds up and when it is not windy, you draw power back off the grid.

The newer systems have a battery array backup so excess energy charges the batteries. You can also tie it into your diesel generator so that when your batteries are low the generator will kick in.

Most folks I know don't spend THAT much money for all the bells and whistles. It is generally overkill. Most everyone I know that has a wind turbine also has at least a small generator as well.

------------------------------------------------
Eliminate the IRS and all payroll taxes! http://www.fairtax.org

They seem to be a whole lot more efficient than solar (provided you have wind) but they are crazy expensive. Putting in a wind turbine would cost me at least as much as I spent for my entire place, and maybe several times, depending on how big of a machine I wanted. I would be surprised if the economics work out once the (lower) rate the electric company will buy back the energy is figured in, along with life expectancy of the turbine and maintenance issues.
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"I am a great believer in luck. The harder I work, the more I have of it." -- Thomas Jefferson

of people with them, and I HATE them! Hang out in a marina frequented by "blowboats" for a while. Between their unsecured halyards rattling against their masts and the dreadful noise of their wind turbines, you can forget sleeping if the wind blows at all.

That said, I'm fine with commercial "wind farms" if they're put in a proper industrial area, but this is one where I join the NIMBY crowd; you really don't want those things in a residential subdivision. Wind farms, remote locations, fine, but not in my back yard.

In Vino Veritas

and permitting involved keeps utilities one of the unionized "legacy industries" that in most states can prevent anything they don't like and in some, like mine, can get most anything they want. Any time you want to do something to make energy cheaper or distibution more efficient, you get the 1-2 punch of the unions and the environmentalists to thwart, delay and when or if it is built at all, the price is many mulitiples of what the work could be done for.

In Vino Veritas

>> mainly, that the transmission system is not really designed to support it.

But worth noting that this is the case because regulators so insisted. Remove the regulations and the infrastructure will be adapted, though, of course, this is infrastructure with a long life and it will not be changed quickly.

>>My understanding of those rolling black-outs when California deregulated - from folks who were concerned about it at the time -

California never tried deregulation, or anything remotely like deregulation. The regime at the time of the rolling blackouts was that environmental regulation - mostly at the local level - had prevented the building of significant new capacity for over 20 years; regulations introduced in '96 (IIRC) froze prices. So, demand was increasing, supply was limited, prices were frozen. Mmmm, what does that cause again? Oh, yeah, shortage!.

The new package of regulations introduced in '96 was *called* deregulation, but you can call a cow a racehorse as often as you like, it's still a cow.

Quentin Langley
Editor of http://www.quentinlangley.net

>> Remove the regulations and the infrastructure will be adapted,

It's not a popular view amongst the free-market fan club, but I think *some* infrastructure is naturally monopolistic, and I think that transmission is one example. Personally, I'd leave this state-controlled, and just consider it "the marketplace" into which parties can buy and sell.

Of the many countries in the world that are looking into utility deregulation, I don't think many are looking to privatize transmission.

Re: California

I was under the impression that California had opened up the grid, and that there was in fact sufficient generation capacity to meet demand, but that the transmission system was not capable of delivering it to the customers that needed it.

>>It's not a popular view amongst the free-market fan club, but I think *some* infrastructure is naturally monopolistic, and I think that transmission is one example. Personally, I'd leave this state-controlled, and just consider it "the marketplace" into which parties can buy and sell.

My point was actually that the grid would adapt to enable different regions to back each other up. With the regulations removed, any system would do this, private or public. The regulations which prevent a national grid have no merit.

It is hard to know whether a system is a natural monopoly or not when it is actually a state sponsored monopoly. You could be right, though. Natural monopolies do exist, and some form of regulation is usually appropriate. Common carrier regulation, which allows other suppliers to use the same grid is fairly common in energy and telecoms.

>>I was under the impression that California had opened up the grid, and that there was in fact sufficient generation capacity to meet demand, but that the transmission system was not capable of delivering it to the customers that needed it.

No, there was a pretty major shortage of supply. It would have been much worse if the economy hadn't completely tanked after the dotcom bubble. The blackouts started in the winter, and peak demand in the California climate is in the summer.

Businesses with interruptible contracts had already had their *annual* quota of interruptions used up by February.

I have written quite widely on this. You can read articles on the failure of California's "deregulation" here on the success of the real deal in Britain here and on US network failure here.

Quentin Langley
Editor of http://www.quentinlangley.net

Looking forward to reading them.

There are quite a number of misconceptions in this thread:

1) That private concerns can't sell electricity to others. In fact, non-utility generators do own and sell electricity to others. They typically sell it through the regional interconnection, which may be a multi- or single state, multi utility market. In Pennsylvania, following deregulation, we also had marketing aggregators buying electricity from various generators and selling to consumers. Most had problems due to offering fixed rate, fixed period contracts, when the price of oil and natural gas increased. Most is not all bowed out of the market leaving the utility as the supplier of last resort. In many states, nothing prevents you from forming a company to buy and sell electricity, except economics.
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2) The idea that we will one day run our electric grid on solar and wind power is not practical. Both can be valuable supplements in various parts of the country, but will never represent the base load for the nation. They are limited by physical constraints. Terrestrial solar for instance is limited by two physical constraints; the solar constant and the day night cycle. This massively limits both the energy density and efficiency of this source. Wind is limited by weather and topography. Also wind turbines are maintenance intensive. the fuel may be "free" but the maintenance isn't. I see a number of wind farms in Pennsylvania, and on any given day, one quarter to one third of the turbines are out of service.
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3) A nationalized grid would not solve all of the nations current electricity distribution problems. Some of the problems, such as the California market are worsened by limited transmission access. However, the real problem is that no new power plants have been built in many states (i.e. California) for 20 years. Marketing power from other states helps support the local grid, but line losses and load growth in the surrounding states make this a short term solution only.
If you want any grid to be reliable, local reliable basload generation is needed. This is not to argue that transmission and distribution improvements are not needed. Last summer's blackouts showed how close to the edge the current grid runs. There are currently two problems with building new transmission and distribution mains. The first is that politicians allow environmentalists and local NIMBY's to block right of way and tie projects up in bureaucratic knots for so long they become uneconomical. The second problem, (particularly in states where the utilitites have been deregulated), is that a market for transmission access hasn't developed to the point where utilities view their transmission network as a profit center rather than a cost center. Unless the utility can view the transmission network as a profit center rather than a cost of doing business, you will see most utilities try to minimize, not optimize transmission expenditures.
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4) I'm not sure if there is single optimal regulatory framework for the national electric grid. The past framework of utilities as highly regulated monopolies lead to companies with no incentive to optimize their cost structure and periods of over construction of generation (the late 1960's - late 1970's) and periods of under construction (early 1980's to late 1990's). The current deregulated framework (in some states) has seen major reductions in utility operating expenses and major increases in power plant capacity factors, but has also seen underinvestment in construction and maintenance of transmission networks. The optimal framework is probably large highly regulated regional transmission co-operatives, local highly regulated distribution companies (your local utility) and deregulated generation companies who sell their electricity to the distribution companies by some auction process.

>>1) That private concerns can't sell electricity to others. In fact, non-utility generators do own and sell electricity to others.

The patchwork of regulation means this varies a lot from one state/region to another. Freeing up restrictions, where they exist, is a good thing. You happen to live in the PJM region, which is one of the better markets.

>>The idea that we will one day run our electric grid on solar and wind power is not practical

It must be good to know what will and will not be invented in the future. The biggest problem with solar power is actually the conversion from heat/light energy into something more usable such as electricity. This may be much improved in the future. Let's see. Another big problem, of course, is our inability efficiently to store electricity. If that ever changes the whole basis of current markets will change.

>>A nationalized grid would not solve all of the nations current electricity distribution problems.

If you mean nationalised, as in government owned, absolutely right. The biggest problem at the moment is too much government intervention, not too little. But they silly regulations which prevent investment in a national grid serve no valid purpose and need to be repealed. Add to that the fact that there is not enough investment in transmission - again a failure of regulation - and you have a highly congested system that is unstable.

If, for example, transmission owners face price regulation instead of profit regulation there would be incentive to invest in better technology. A small reduction in costs could lead to a big increase in profits. However, with profit regulation, owners make the same return on their investment however well or badly they run the system.

Largely local regulations have also - as you pointed out - prevented investment in generating capacity.

Overall, the burden of regulation is far too high and highly inconsistent. That is why the most prosperous area on the planet was facing rolling blackouts just a few years ago.

Quentin Langley
Editor of http://www.quentinlangley.net