I don’t know this area well, but my understanding is that the “generation” portion represents a market where different companies can compete to provide power, while the other portion is the specific company that has wires to my house operating as a regulated monopoly. So while I don’t trust the detailed breakdown of the different monopoly charges (I suspect the company has quite a bit of freedom in practice to move costs between buckets) the high-level generation-vs-the-rest breakdown seems trustworthy.
Yes, if we assume that there is a competitive market for generation, price of transmission may prevent grid solar generation from being built. But you asserted that you could learn the cost of transmission from the bill.
Maybe we’re meaning different things by “cost”? If a large monopoly spends $X to do Y then even if they’re pretty inefficient in how they do Y I’d still describe $X as the cost. We might discuss ways to get the cost down closer to what we think it should be possible to do Y for (changing regulations, subjecting the monopoly to market forces in other ways, etc) but “cost” still seems like a fine word for it?
Even in this last comment you keep making that very distinction. The regulator dictates the price but you assert that you know what the monopoly spends.
If you just want to assert that the current set of regulations are unsustainable, then I agree. But not a single one of the comments reflects a belief that this is the topic, not even any of your comments.
you assert that you know what the monopoly spends.
First, don’t we know that? It’s a public company and it has to report what it spends.
But more importantly, I do generally think getting a regulated monopoly like this to become more efficient is intractable, at least in the short to medium term.
Maybe you could learn something by looking at the public filings, but you didn’t look at them. By regulation, not by being public, it has to spend proportionate to its income, but whether it is spending on transmission or generation is a fiction dictated by the regulator. It may well be that its transmission operating costs are much lower than its price and that a change of prices would be viable without any improvement in efficiency. This is exactly what I would how I would expect the company to set prices if it controlled the regulator: to extract as much money as possible on transmission to minimize competition. I don’t know how corrupt the regulator is, but that ignorance is exactly my point.
whether it is spending on transmission or generation is a fiction dictated by the regulator
That’s the key place where we disagree: my understanding is that the “generation” charges are actual money leaving the utility for a competitive market, and this is a real division.
The transmission utility is not purely a transmission company. It spends money on both generation and transmission. Some generation charges leave to other companies. This is not a competitive market, but even if it were, it would only give you a bound on the cost of generation and tell you nothing about the cost of transmission.
That breakdown is fiction dictated by the regulator.
How so?
These numbers are dictated by the regulator. What mechanism is there to make them have any relation to the real world?
I don’t know this area well, but my understanding is that the “generation” portion represents a market where different companies can compete to provide power, while the other portion is the specific company that has wires to my house operating as a regulated monopoly. So while I don’t trust the detailed breakdown of the different monopoly charges (I suspect the company has quite a bit of freedom in practice to move costs between buckets) the high-level generation-vs-the-rest breakdown seems trustworthy.
Yes, if we assume that there is a competitive market for generation, price of transmission may prevent grid solar generation from being built. But you asserted that you could learn the cost of transmission from the bill.
Maybe we’re meaning different things by “cost”? If a large monopoly spends $X to do Y then even if they’re pretty inefficient in how they do Y I’d still describe $X as the cost. We might discuss ways to get the cost down closer to what we think it should be possible to do Y for (changing regulations, subjecting the monopoly to market forces in other ways, etc) but “cost” still seems like a fine word for it?
Even in this last comment you keep making that very distinction. The regulator dictates the price but you assert that you know what the monopoly spends.
If you just want to assert that the current set of regulations are unsustainable, then I agree. But not a single one of the comments reflects a belief that this is the topic, not even any of your comments.
First, don’t we know that? It’s a public company and it has to report what it spends.
But more importantly, I do generally think getting a regulated monopoly like this to become more efficient is intractable, at least in the short to medium term.
Maybe you could learn something by looking at the public filings, but you didn’t look at them. By regulation, not by being public, it has to spend proportionate to its income, but whether it is spending on transmission or generation is a fiction dictated by the regulator. It may well be that its transmission operating costs are much lower than its price and that a change of prices would be viable without any improvement in efficiency. This is exactly what I would how I would expect the company to set prices if it controlled the regulator: to extract as much money as possible on transmission to minimize competition. I don’t know how corrupt the regulator is, but that ignorance is exactly my point.
That’s the key place where we disagree: my understanding is that the “generation” charges are actual money leaving the utility for a competitive market, and this is a real division.
The transmission utility is not purely a transmission company. It spends money on both generation and transmission. Some generation charges leave to other companies. This is not a competitive market, but even if it were, it would only give you a bound on the cost of generation and tell you nothing about the cost of transmission.