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Strange priorities: Wall Street Journal alarmed by slow growth in electricity usage

The fact that electricity usage among Americans has slowed considerably in recent years  — mainly because of greater energy-efficiency — is good news for the environment.

But the Wall Street Journal’s first impulse in reporting this trend is to worry about what it means for the companies that sell us electricity.

For snarky slants on the Journal’s priorities, see HERE and HERE.

 

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6 Comments

  1. I am sure that you realize that if usage goes down, revenue goes down. Utilities have many fixed costs to maintain their infrastructure and comply with various regulations and contingencies.

    Therefore the utility companies can either:

    a) close down plants/ not develop newer more efficient plants

    b) pass the costs on to the customer by raising rates.

    that seems like a fair point to be made in the business section of the Wall Street Journal.

  2. Craig Knauss

    doc,

    FYI, many electric power companies also have high overhead with some extremely well-paid executives of varying degrees of importance. That overhead could be reduced with minimal effect on output and without requiring increases in rates. And FYI, many, if not most, investor owned plants (as opposed to government owned like TVA) have a pretty healthy markup on their power. Nuke plants can produce power for less than 2.5 cents per kWh. But I was paying 13.5 cents per delivered kWh when I lived in Illinois back in 2001. I realize there are taxes, transmission and distribution fees, etc. but 11 cents per kWh more? That’s a 440% markup. Where I live now we have nuke and hydropower. Hydro is less than 1 cent per kWh to generate. And fossil fuel plants are less than 4 cents per kWh. And FYI, the Illinois Commerce Commission used to guarantee Commonwealth Edison a minimum 10% profit. How many large corporations get that high a profit margin?

  3. Good information Craig, thanks.

    I am pretty sure that in Wisconsin there is a public services commission that regulates/approves pricing by the utilities and there is a citizens utility board that contests and fights most proposed increases and new power plants.

    I wish we had more nuclear power in Wisconsin. Hydro is less of an option here.

  4. doc said:” I am sure that you realize that if usage goes down, revenue goes down.”

    That’s not true. Where I live, we receive a discount if we agree to use less during peak usage. They have devices installed which can shut off power to certain electrical equipment at our homes. They also give discounts for installing energy efficient equipment. If they can keep usage down they won’t have to build more power plants.

  5. Tex,

    That is true during peak usage, however, I am talking about over all usage as was the initial post.

  6. doc said: “I am talking about over all usage as was the initial post.”

    Read my last 2 sentences again, Dummy! That is overall usage. If they keep usage down, they don’t have to increase infrastructure, or build new power plants. They also save on fuel to operate the plants.
    So if they keep usage down, revenue goes up. It’s called efficiency.

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