Demand Billing for Utilities

[mk162]

$10mil a year? WOW.  I am surprised the execs wouldn't go for it.  Well, not really.  It's a no brainer, and sometimes they have no brains.

[Northland]

$10mil a year? WOW.  I am surprised the execs wouldn't go for it.  Well, not really.  It's a no brainer, and sometimes they have no brains.

Their explanation.... "we expect to return 28% on equity, this has a 16% return "
I don't understand why 28% is required.... hell they can borrow at 4%, so a 16% return would appear (as you said) to be a no-brainer.

[Northland]

So get this, my home electric usage is actually similar this time of year, 12 000-19000 kwh.  Same service amperage size too.  The only difference is the shop is 3ph. 

$0.27 shop   $0.11 house.

In Minnesota we have a "public utilities commission" that oversees rate requests and helps establish rates.... Montana probably does also.
I would guess that it's a case of the commission shifting the burden of cost...  OFF of homeowners and ON to business. The only logic behind that is...  for a business, the costs are tax deductable.
That's flawed logic, but "it is.. what it is"

[mk162]

and businesses are evil and have unlimited funds

[ZooCity]

Well, I hate to micro manage the utility co. but where is that line drawn?  Why is my shop on business rates and the home not when they both:  draw the same kwh, have the same service amperage.   

That's what I want to dig into- what defines which.  Might be a way to get in there edgewise and get the rate reduced but probably not.

FYI, the way util co.'s are regulated, regarding rate setting, is designed to incentivize capital investment but it also builds an incentive for the util. to have large operating costs.  This, in my opinion, invites all sorts of what I'll call "deuschy rich white guy problems". 

In Montana, some jackhole, d-bag of a governor...what was his name? ...Mark Racicot, sold the state on the concept of deregulation but it was just a scam he had cooked up for personal gain.  Think about the free market aspect of that, nobody wants to own power lines in Montana- miles upon miles of line and very few people to buy the power from you.  So now almost half of our bills are just tithing whoever it is that owns the supply service.   

/rant over. 

[inkman996]

In 2000 Connecticut deregulated the power companies, well company. Back then it was called North East Utilities. They owned all the transmission lines and also all the power generating facilities, including Nuclear power. The Nuke plants have been shut down for a decade now. After deregulation which supposedly allowed customers to purchase power from who ever North east utilities restructured, they split in to two companies one was CL&P which owns all transmission, and the other is UI which sells the power. Now the funny thing is their is no competition for selling electricity, UI is still the only provider to the whole state minus our town which generates its own. So deregulation did zero to stop the monopoly on energy in this state, no energy company will get in business in this state because CL&P still owns all the lines and have to be paid to use their lines. Its all BS.

BTW I just read a power bill and nearly died, our normal KW is around $.14 but demand billing is $9.50 holy crap! Our bill is roughly half demand billing charges, and for you folks lucky to not have sales tax be glad because we have to pay sales tax on the power bill as well.

[ZooCity]

Interesting.  I know that in PA you used to have actual options.  You could choose to get you power from a wind based co., for instance.  Sounds like deregulation was mostly a scheme to get single entities monopolizing the power delivery and doing, essentially, whatever they want with rates. (they do have to work within a system but it sounds like rates skyrocketed almost everywhere this happened) 

They just sold it to everyone on the concept that the "free market" of deregulated energy will bring better rates and service.

I wonder how many deuschy rich white guys it took to cook this up? 

[inkman996]

Our supplier stopped producing its own power when they shut down the nuclear plants, get this all our power comes from Niagara which also supplies many other states, yet we pay much more than other states. It is a monopoly actually made worse by deregulating, a company tried to build a steam plant for generating power yet some how UI stopped them, god forbid if you have competition oh no, the CEO of UI wouldnt be able to get his mere $100,000,000+ salary.