Electric Bill to go up by 47% next month

[zinger1457]

There is simply too much shared infrastructure for any utility to accurately determine how their fixed costs should be allocated between different types of customers.

As a practical matter the per user fees charged mean lower-consumption customers (e.g. residential) end up subsidizing higher-consumption (commercial/industrial) users.

Tell me about it, during my last electric utility rate increase my average electric bill went up ~20% even though they decreased the cost per kwh, all due to fixed costs increases.

 

[ERD50]

There is simply too much shared infrastructure for any utility to accurately determine how their fixed costs should be allocated between different types of customers.

As a practical matter the per user fees charged mean lower-consumption customers (e.g. residential) end up subsidizing higher-consumption (commercial/industrial) users.

I'm sure that commercial accounts with 480V three-phase and high amps pay a higher connect fee, not the same as residential at all.

It also means that lowering actual usage is no longer as effective at lowering your bill as it used to be when per-user fees were more reasonable. YMMV

Hard to say what is "reasonable". It appears that many utilities try to allocate their fixed costs based on usage, but maybe that's not really 'fair' either? If I use half the energy my neighbor does, we are still using the same infrastructure.

I don't think there is a clear cut 'reasonable', there's lots of ways to look at it.

-ERD50

 

[ERD50]

Tell me about it, during my last electric utility rate increase my average electric bill went up ~20% even though they decreased the cost per kwh, all due to fixed costs increases.

And who is to say that's unreasonable? Maybe they have a lot of updates planned over the next few years, and have to start paying now as it gets implemented?

Just looking at a bill isn't going to tell you that.

-ERD50

 

[NW-Bound]

Here's in Phoenix, my utility SRP has said there's no danger of rolling blackouts in 2022, and not even in 2023. But beyond that, they are afraid infrastructure projects will not come online fast enough to keep up with demand.

Sounds to me this is one of the problems that can be solved simply by having more money. Yes, just money.

“Lack of money is the root of all evil.” – George Bernard Shaw

And rolling blackouts are quite evil.

I was thinking about adding "lack of energy" to the above quote, but then remember that it is just redundant. Money buys energy.

 

[Turbo29]

Here's in Phoenix, my utility SRP has said there's no danger of rolling blackouts in 2022, and not even in 2023. But beyond that, they are afraid infrastructure projects will not come online fast enough to keep up with demand.

Sounds to me this is one of the problems that can be solved simply by having more money. Yes, just money.

“Lack of money is the root of all evil.” – George Bernard Shaw

And rolling blackouts are quite evil.

I was thinking about adding "lack of energy" to the above quote, but then remember that it is just redundant. Money buys energy.

They have the money to add the generating capacity that they need but they are not being allowed to add it as a certain faction thinks natural gas fueled generation is evil.

 

[NW-Bound]

They have the money to add the generating capacity that they need but they are not being allowed to add it as a certain faction thinks natural gas fueled generation is evil.

Natural gas is so expensive, this may not be an option anymore.

How about back to burning coal, like Europe is doing?

From Bloomberg:

European plans to mobilize idle coal-fired power plants across the continent are pushing up the price of carbon permits needed to burn the dirtiest fossil fuel.

Germany plans to reopen around 10 gigawatts of coal capacity to replace gas-fired generation, along with similar moves to increase burning of the fuel in the Netherlands, Austria, Belgium and France. That means utilities using coal need to buy up more permits in the European Union’s Emissions Trading System to be compliant...

 

[Koolau]

I'm sure that commercial accounts with 480V three-phase and high amps pay a higher connect fee, not the same as residential at all.



Hard to say what is "reasonable". It appears that many utilities try to allocate their fixed costs based on usage, but maybe that's not really 'fair' either? If I use half the energy my neighbor does, we are still using the same infrastructure.

I don't think there is a clear cut 'reasonable', there's lots of ways to look at it.

-ERD50

My point is that the electric companies see the hand writing on the wall. As KWh costs go up, and alternatives become available (more efficient electric appliances) actual KWh will go down. SO, it's my theory that electric companies are positioning themselves to get the same amount of money from folks WITHOUT actually raising per KWh rates dramatically. They simply allocate more of the revenue to fixed costs. Now, I may be wrong, but the fixed costs ARE going up in many areas.

I've already mentioned that my electric bill is the same as 14 years ago. My KWh have gone down, the "rates" have only gone up marginally. Conclusion? Fixed costs have become more and more of the bill. Do we believe that's an anomaly or is it by design? You decide.

 

[NW-Bound]

My point is that the electric companies see the hand writing on the wall. As KWh costs go up, and alternatives become available (more efficient electric appliances) actual KWh will go down. SO, it's my theory that electric companies are positioning themselves to get the same amount of money from folks WITHOUT actually raising per KWh rates dramatically. They simply allocate more of the revenue to fixed costs. Now, I may be wrong, but the fixed costs ARE going up in many areas.

I've already mentioned that my electric bill is the same as 14 years ago. My KWh have gone down, the "rates" have only gone up marginally. Conclusion? Fixed costs have become more and more of the bill. Do we believe that's an anomaly or is it by design? You decide.

Again, don't forget to account for inflation.

Compared to 15-20 years ago, utilities have to pay more for materials and also labor costs, just like everybody else.

 

[Mulligan]

My point is that the electric companies see the hand writing on the wall. As KWh costs go up, and alternatives become available (more efficient electric appliances) actual KWh will go down. SO, it's my theory that electric companies are positioning themselves to get the same amount of money from folks WITHOUT actually raising per KWh rates dramatically. They simply allocate more of the revenue to fixed costs. Now, I may be wrong, but the fixed costs ARE going up in many areas.



I've already mentioned that my electric bill is the same as 14 years ago. My KWh have gone down, the "rates" have only gone up marginally. Conclusion? Fixed costs have become more and more of the bill. Do we believe that's an anomaly or is it by design? You decide.

Maybe some near term, but if the electric car projections ring true the next 10-15 years some certain public entity is going to benefit from providing the juice to charge them.
How nice of Southern California Edison to assist you in buying an electric car.

https://cars.sce.com

 

[ERD50]

My point is that the electric companies see the hand writing on the wall. As KWh costs go up, and alternatives become available (more efficient electric appliances) actual KWh will go down. SO, it's my theory that electric companies are positioning themselves to get the same amount of money from folks WITHOUT actually raising per KWh rates dramatically. They simply allocate more of the revenue to fixed costs. Now, I may be wrong, but the fixed costs ARE going up in many areas.

I've already mentioned that my electric bill is the same as 14 years ago. My KWh have gone down, the "rates" have only gone up marginally. Conclusion? Fixed costs have become more and more of the bill. Do we believe that's an anomaly or is it by design? You decide.

Yes, that could be the way it is.

I recall reading about the water utilities in Germany (I may have shared this earlier in this or another thread) - people got on a water conservation kick, but the utility has mainly fixed costs (30 year bonds probably, staff, maintenance, etc). So as people used less water, the utility had to raise rates. This caused people to use even less water! So that spiraled through a few cycles, and then the utility had problems with the sewage, as the drains counted on a certain amount of water to keep things from clogging. So now they had more expense to clear the sewer lines.

The 'right' charge might be a relatively high connect charge with a relatively high base allowance of gallons/liters, so moderately low users aren't getting hit from both ends. That would be a good study for the "Freakonomics" guys, if they haven't already.

-ERD50

 

[Koolau]

Yes, that could be the way it is.

I recall reading about the water utilities in Germany (I may have shared this earlier in this or another thread) - people got on a water conservation kick, but the utility has mainly fixed costs (30 year bonds probably, staff, maintenance, etc). So as people used less water, the utility had to raise rates. This caused people to use even less water! So that spiraled through a few cycles, and then the utility had problems with the sewage, as the drains counted on a certain amount of water to keep things from clogging. So now they had more expense to clear the sewer lines.

The 'right' charge might be a relatively high connect charge with a relatively high base allowance of gallons/liters, so moderately low users aren't getting hit from both ends. That would be a good study for the "Freakonomics" guys, if they haven't already.

-ERD50

Ideally, there would be no fixed charges and the "rate" would be higher which would encourage conservation. YMMV

 

[ERD50]

Ideally, there would be no fixed charges and the "rate" would be higher which would encourage conservation. YMMV

But the utility needs a certain amount of water to be used keep the sewers running.

Now, if they were building new with this conservation in mind, it wouldn't be a problem.

Last summer, they flushed our hydrants, just when people's grass needed watering. It's a shame there wasn't a convenient way to put that water into a tanker truck and let people water their lawns with it. But that would be a logistic nightmare.

-ERD50

 

[2cheap2eat]

but dont worry, buy that electric vehicle!

I’ve been waiting over 10 months for my ele vehicle! People forget it still costs on your electric bill vs gas station!

 

[aja8888]

I’ve been waiting over 10 months for my ele vehicle! People forget it still costs on your electric bill vs gas station!

Just think of all the electricity you are saving by not having the EV yet!

 

[audreyh1]

I’ve been waiting over 10 months for my ele vehicle! People forget it still costs on your electric bill vs gas station!

We don’t forget. It just doesn’t cost as much.