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DarkRange55

DarkRange55

I am Skynet
Oct 15, 2023
1,855
My friend thinks that Americans pay far too many taxes and we should have national free government subsidized electricity and the government should just own and operate the entire power grid.
He says we pay income tax, property tax, sales tax, fuel tax, excise taxes, utilities taxes, sin taxes, sugar taxes, gambling taxes, ect.

What do you think? Should we subsidize electricity to be free for the nation like universal healthcare?

With electricity prices, you're also paying for the maintenance and to build the infrastructure and they have to make a profit, too, not just the energy itself.

All utilities either public or private are regulated by state and federal government. Thats for safety, reliability, and cost. Publicly owned power companies dont collect a profit but they also dont pay taxes on their installed infrastructure. That can result in higher taxes for the consumer in those counties which can offset the usually lower per unit cost of a public power company.

Private investor owned company's make a profit that is set by the states public utility commission (PUC). They also pay franchise fees to the cities and counties they serve and taxes on every piece of installed plant (poles, wires, cable, transformers etc).

One can argue the advantages and disadvantages of either.

Power companies like cable suppliers operate under franchise agreements with the government in the area they operate. They pay $$ to the government where they operate.
(Municipalities do not pay. Investor owned pay)

A franchise agreement is a negotiated contract between a municipality and a utility service provider that grants the utility provider exclusive rights to the area. This fee typically covers the expense of utility companies' use of public space also known as public "right-of-way" for energy infrastructure like power lines or gas pipelines. This is typically between 5–7% of a utility's budgeted revenue, but can sometimes be as high as 10%. Franchise fees are different from taxes because they are negotiated with local agencies, not determined by the legislature.

Some poles only have 1 utility on them and those are called solely owned poles. If another utility company wants to attach to that pole they pay the utility that installed a percentage. Utilities share the cost of poles. Based on how much of the pole height and class they use/need. They are called joint poles because they are jointly owned. Each Utility must buy space on the pole.
Cable companies and phone companies share the same position on poles. It gets fairly messy and complex. Their stuff is always below the power utility equipment/conductors. Lowest level on the pole usually since fiber is the newest guy in town and poses no safety threat.
Property taxes must be payed on each pole.
Its quite an accounting exercise overseen by the Joint Pole Assoc



One of my godfather's has a bachelors in nuclear engineering and a PhD in electrical engineering. He used to work for the electrical utilities.
One of my previous jobs was fixing power plants.
One of my mentors holds many patents on solar technology (and many other inventions).
 
DarkRange55

DarkRange55

I am Skynet
Oct 15, 2023
1,855
Utility economics are very complex. Probably more complex than any other business. This is due to the necessary government over-site and regulations to insure customers are not over paying while still allowing the utility to make a fair and reasonable profit. This is complicated further when governments attempt to change or control public behavior thru rate tiers and incentives such as solar power grid interconnections, LEDs, refrigerator rebate programs etc, etc.

Utilities must apply to the Public Utilities Commissions for rate increases. Major capital projects must be approved by the PUCs as Utilities earn a profit (rate of return) on the value of its installed plant (wires, transformers, switches etc etc). This percentage is negotiated with the PUC.

I suspect the economics is even more complex now as customers install supplemental power (solar etc) which reduces utilities revenue but the utility is still obligated to install enough capacity to serve that customers entire load should that system fail or become inoperable.
Net metered buildings - Credited wholesale but buying it for retail from the grid - Net metering will compensate you at the retail rate, whereas net billing will compensate you at the lesser supply or wholesale rate. With net metering, the electricity you upload to the grid is worth the same as the electricity you'd purchase from the grid.
Programs differ in how long credits are allowed to roll over and how much value each credit has. Many states have moved away from net metering in recent years, replacing it with net billing that offers lower credits for all kWh sent to the grid from solar owners' systems. the utility replaces their electric meter with a new bi-directional meter, which can record energy the solar panels export to the grid and energy the customer takes from the grid when the solar panels aren't making enough power to run the home's appliances.

When utility companies want to incentivize customers like businesses to switch or upgrade to a more efficient or more green system - Utility companies offer rebates and discounts on equipment and the government can offer tax credits & (tax) deductions as well as faster depreciation.

In olden times utilities wanted customers to use more. They even promoted appliances etc, etc.
Governmental agencies ( Public Utility Commissions etc) are promoting conservation. It does delay the need to reinforce infrastructure.

The utility companies give incentives for developers and building owners to install or upgrade to more energy efficient systems so it allows the provider to supply a greater volume into the whole grid…
 
DarkRange55

DarkRange55

I am Skynet
Oct 15, 2023
1,855
I've seen two electric meters for a high rise tower that were bonded. There was a device tying the two meters together because back in 1988 you got grandfathered in. Because it's on a tiered schedule, they call it a "schedule" but it's for billing, if you use this much then you're in this payment bracket. And since that reads as one, they save a few cents per kilowatt hour in the building because this was done 30 years ago. That can make a difference when you're looking at $80,000 a month electric bills. 💸
 
endofline2010

endofline2010

Student
Aug 8, 2024
140
@DarkRange55 there are many states (both red and blue) that have fully deregulated utilities, meaning there is no government intervention as far as price. When there was a severe winter storm in Texas several years back, some people got charged thousands of dollars for a month of electricity because of high demand.

I think typically, subsidies are a bad thing. They would encourage overuse, and then rationing of resources due to scarcity.
 
DarkRange55

DarkRange55

I am Skynet
Oct 15, 2023
1,855
@DarkRange55 there are many states (both red and blue) that have fully deregulated utilities, meaning there is no government intervention as far as price. When there was a severe winter storm in Texas several years back, some people got charged thousands of dollars for a month of electricity because of high demand.

I think typically, subsidies are a bad thing. They would encourage overuse, and then rationing of resources due to scarcity.
I remember the Texas situation. They are odd since they really aren't part of the North American power grid.


Washington State has such cheap electricity because of all the federal government hydroelectric dams built as PWP. The Grand Coolie Dam was originally built for irrigation of the Columbia Valley but cheap electricity was a side effect. The dam is still only 3/4th complete because they were gonna add another powerhouse. Smelting aluminum uses a lot of electricity (which they need for aircraft) so they built the aircraft industry in WA (Boeing, ect). Then the Bonneville Power Company had a 100 year contract and during the Enron Scandal they were able to divert power to CA and still pay their employees since the electricity was so cheap they were making a fortune. There's an aluminum smelting plant up north by Bellingham.
You have 2,5000 amp fuses are for commercial buildings as the feeder comes to the transformer from the street (I can provide a picture of me holding one). Steel plants have bigger stuff.
A lot of the aluminum comes from China now because Three Gorges Dam provides a lot of cheap electricity - a lot of electricity is needed for smelting aluminum. They use big carbon rods in a big cauldron of aluminum ore and short circuit to burn off all the impurities. Plasmas conduct electricity. This is because in a plasma an important portion of the atoms are ions.
Plasma arc furnace: two big electrodes to smelt new steel a giant rod in a tunnel thats at like a million volts hotter than the sun and it melts steel.
Today you would not be able to build those dams anywhere near the same cost, primarily due to new regulations. The University of Washington conducted a study on this maybe 20 years ago.

Something of concern is how they continue to increase both the voltage for electricity and the water pressure for plumbing with all of the new developments. They keep having to add substations or just increase the voltage on the lines, but the conductors have essentially reached their limit and if they increased any further, they're going to be arcing.


One of my godfathers actually has a bachelors in nuclear engineering and a PhD and electrical engineering and worked for the government and utility companies for a long time.
I remember once upon a time have a job to fix power plants









 
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