Utility News

The New York Times:

Wired connections to the home — cable and telephone lines — are the major way that Americans move information. In the United States and in most of the world, a monopoly or duopoly controls the pipes that supply homes with information. These companies, primarily phone and cable companies, have a natural interest in controlling supply to maintain price levels and extract maximum profit from their investments — similar to how OPEC sets production quotas to guarantee high prices…

The solution is to relax the overregulation of the airwaves and allow use of the wasted spaces. Anyone, so long as he or she complies with a few basic rules to avoid interference, could try to build a better Wi-Fi and become a broadband billionaire. These wireless entrepreneurs could one day liberate us from wires, cables and rising prices.

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David Zetland on Forbes:

The real problem is that the price of water in California, as in most of America, has virtually nothing to do with supply and demand. Although water is distributed by public and private monopolies that could easily charge high prices, municipalities and regulators set prices that are as low as possible. Underpriced water sends the wrong signal to the people using it: It tells them not to worry about how much they use.

Low prices lead to shortages. Water managers respond to them with calls for conservation. But this often fails… When voluntary conservation fails, water agencies impose mandatory rationing, which is unfair and inefficient because people who have historically been water misers are cut back by the same percentage as water hogs.

If water was priced to reflect scarcity, a decrease in supply would lead to an increase in price, and people would demand less…

In a sensible water pricing system, everyone would be guaranteed a base quantity of water at a low price. Those who used more would face a steep price hike.

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Christian Science Monitor:

Economists agree that the real cost of burning fossil fuels – damage to the environment and health, not to mention the cost of replacing them as they run out – isn’t reflected in today’s prices. A carbon tax would directly send a market signal to reduce carbon use. And it would provide an incentive for investment in renewable sources, especially if the tax is set at the source: for natural gas, at the wellhead; for coal, at the mine entrance. Oil would be charged at the refinery because petroleum products create different levels of emissions when burned.

The World Resources Institute calculates that a tax of $15 per ton of carbon-dioxide emissions would double the costs for coal use and raise gasoline prices about 13 cents a gallon (or about 5 percent, at today’s prices). Natural-gas prices would rise less than 7 percent. That would result in a 12 percent reduction in CO2 emissions.

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Christian Science Monitor:

Congress may move soon to tackle global warming. The boldest action in play would set limits on carbon emissions while allowing cleaner companies to sell “permits” to the worse polluters. But lawmakers should be wary: Europe’s record with “cap and trade” is wobbly, at best…

Industry lobbyists were able to punch loopholes in the EU’s complex system. The EU ended up handing out far too many free permits: Their value plummeted from more than $30 a ton to about $1 last year, hurting the incentive. In industries that were hit by caps, many moved production outside the EU, taking their polluting ways with them.

Even proponents of the other major international cap-and-trade experiment, the Kyoto Protocol, a worldwide carbon-trading system among 160 countries set up in 1997, agree its carbon-cutting results have been modest at best. And reports of fraud and other problems with trading permits have cast doubt on its effectiveness.

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TCS.com:

People are saying that there are a new set of economic assumptions surrounding energy use. Oil prices are very high. There’s all the concern about global warming. Therefore, they say, we need to invest more in this area.

There’s been fantastic growth in wind, solar, ethanol. We have government subsidies for all of these things, which encourages people to invest in them even at high levels. And you can see it crossing over into the popular culture. It’s not just business publications. It’s everywhere you look - TV, radio, newspapers, company’s websites. Everybody is talking about producing alternative energy, using alternative energy.

So, I think the stars are aligning for a bubble in alternative energy.

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Thomas Friedman (NYT Subscription):

Have your eyes recently popped out of your head when you opened your electric bill? Do you, like me, live in one of those states where electricity has been deregulated and the state no longer oversees the generation price so your utility rates have skyrocketed since 2002?

If so, you need to listen to a proposal being aired by Jim Rogers, the chairman and chief executive of Duke Energy, and recently filed with the North Carolina Utilities Commission. (Duke Energy is headquartered in Charlotte.) It’s called “save-a-watt,” and it aims to turn the electricity/utility industry upside down by rewarding utilities for the kilowatts they save customers by improving their energy efficiency rather than rewarding them for the kilowatts they sell customers by building more power plants.

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The New York Times:

Pipes and tunnels are aging fast with many of these subterranean networks nearly a century old. In 2003, the Environmental Protection Agency estimated that it would take nearly $277 billion to keep the nation’s water distribution systems up to par over the next 20 years. That is a lot of money. And to get the necessary federal, state and local funds, it will take a lot of public support for a system people blissfully take for granted.

The fear is that if too many people convert to bottled water, there would be even less political support for such spending. The last thing America needs is two water streams — one for the rich and another for the rest of us.

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Christian Science Monitor:

More electric utilities need to install ’smart’ meters that show real-time costs and reduce power demand…

Electricity providers need to become facilitators for their customers in achieving energy efficiency and reducing their carbon footprint.

Being “smart” isn’t only for meters that alter electricity usage.

It’s for the planet, too.

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Dave Cogdill in the San Francisco Chronicle:

Water issues in California are divisive. Decades ago, water disputes were settled at the end of a gun, and even today policymakers use terms like “water wars.” But what are we fighting over? So many of these battles are simply a natural result of dwindling supplies in the face of increasing needs. Environmentalists want water to restore habitats and protect endangered species. Builders want water to sustain development and growth. Farmers want water to grow their crops. Average Californians want water for their homes and watering their lawns. But what makes no sense is the fact that we are fighting over a completely renewable resource.

Instead of fighting, we should develop a way to manage this resource responsibly and maximize the usage of the water resources we have.

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Tennessee Center for Policy Research:

Gore’s mansion, located in the posh Belle Meade area of Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service (NES)…

The average household in America consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh—more than 20 times the national average.

Last August alone, Gore burned through 22,619 kWh—guzzling more than twice the electricity in one month than an average American family uses in an entire year. As a result of his energy consumption, Gore’s average monthly electric bill topped $1,359.

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