TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Home Electricity Use in U.S. Falling to 2001 Levels

Discussion in 'Energy, Environment, and Policy' started by RobStark, Dec 30, 2013.

  1. RobStark

    RobStark Active Member

    Joined:
    Jul 2, 2013
    Messages:
    2,900
    Location:
    Los Angeles
    #1 RobStark, Dec 30, 2013
    Last edited by a moderator: Dec 31, 2013
    NEW YORK (AP) -- The average amount of electricity consumed in U.S. homes has fallen to levels last seen more than a decade ago, back when the smartest device in people's pockets was a Palm pilot and anyone talking about a tablet was probably an archaeologist or a preacher. Because of more energy-efficient housing, appliances and gadgets, power usage is on track to decline in 2013 for the third year in a row, to its lowest point since 2001, even though our lives are more electrified. Here's a look at what has changed since the last time consumption was so low.

    Full Article in link


    Home Electricity Use in U.S. Falling to 2001 Levels
     
  2. SCW-Greg

    SCW-Greg Active Member

    Joined:
    Jun 13, 2012
    Messages:
    1,703
    Location:
    Beaverton, OR
    Great read and good news. Thanks for sharing.

    So rising electricity prices have nothing to do with the economics of supply and demand then.
     
  3. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

    Joined:
    Mar 8, 2012
    Messages:
    12,743
    Location:
    Texas
    Nope. Deregulation and corporate greed.
     
  4. J in MN

    J in MN S60 P12635

    Joined:
    Jul 23, 2008
    Messages:
    460
    Location:
    Minnesota
    That's not fair. Infrastructure replacement such as old rotting power poles and transformers containing PCBs are costs that must be recovered through higher rates.
     
  5. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    #5 Robert.Boston, Dec 31, 2013
    Last edited: Dec 31, 2013
    Utility restructuring has decreased the cost of power. In the mid-Atlantic region, the estimate is a savings of $2.2billion annually. I know of power plants that, when owned by regulated utilities, had 500 employees and was operated at about 65% capacity; once exposed to competitive forces, the same plant operates at >85% capacity with only 50 employees.

    The effect in the nuclear industry has been profound. Restructuring moved most nuclear assets from regulated utilities to competitive suppliers in the early 2000s. Take a look at the efficiency improvements in refueling outages:
    US-Nuclear-Refueling-Outage-Days0011.JPG

    But we digress....
    Greg, since you live in Oregon, I thought it'd be helpful to see the average wholesale price of power in your state, annually:

    $/MWh
    MidC
    2003 40.95
    2004 44.62
    2005 62.80
    2006 50.57
    2007 57.00
    2008 65.32
    2009 35.85
    2010 35.88
    2011 29.42
    2012 22.78
    2013 35.71
    Source: EIA (Electricity - Analysis & Projections - U.S. Energy Information Administration (EIA))

    These are nominal dollars, too; on an inflation-adjusted basis, the decline in recent years is even sharper. (2013 is partial year, of course, so excludes most of December, when prices are usually lower than the annual average.) To the extent that your retail prices are rising, it has to do with higher investments in distribution and transmission facilities (including SmartGrid initiatives), support for energy efficiency and demand-side management programs, and subsidies for renewables.

    Another point: as usage falls, the fixed costs of running the power system have to be spread over a smaller base. Consequently, the delivered price rises.
     
  6. SCW-Greg

    SCW-Greg Active Member

    Joined:
    Jun 13, 2012
    Messages:
    1,703
    Location:
    Beaverton, OR
    I love this (forum) community. Some smart people here.
    Thanks Robert.

    Yeah I figured fixed costs, maintaining old dams, even taking out smaller dams, renewables, etc. aren't helping. My first comment above was to stir the pot.

    I'm on TOU now, and it looks like I'm saving about $35/mo, even tho my usage has nearly doubled. Switching over to TOU, meant they had to swap out my (relatively new wireless) meter, for another newer one, that can track time.

    In the coming years (advent of localized solar, regional renewables, etc), I think power companies have a delicate balancing act to walk.
     
  7. CalDreamin

    CalDreamin Member

    Joined:
    Jun 12, 2013
    Messages:
    438
    Location:
    SF Bay Area, CA
    Agreed, thanks Robert.
     
  8. SFOTurtle

    SFOTurtle Active Member

    Joined:
    Jan 21, 2013
    Messages:
    1,039
    Location:
    Los Altos, CA
    I wish we actually had some deregulation here in California that would bring in some new entrants into the major metro areas. PG&E and SoCal Edison have no major competitors and thus in effect are regulated monopolies, but not regulated or run particularly well.
     
  9. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    California restructured its generation sector, but then got scared and shut down retail competition. So if you want to build a new power plant in the state, you basically have to get a long-term contract with one of the three investor-owned utilities (SCE, PG&E, SDG&E) or the scattered munis. So even though the power plants in the state are owned by various non-regulated companies, in effect they are leased by the utilities.

    As an example of what it isn't allowed: I can't build a wave farm and sell that power to Tesla Motors. Tesla is served by PG&E under its monopoly franchise, so unless PG&E is willing to waive its franchise (fat chance) I can only sell to PG&E. There are some fancy ways around this financially, but it shouldn't have to be complicated for willing buyers and sellers to enter into a contract.
     
  10. ZBB

    ZBB Emperor

    Joined:
    Feb 27, 2013
    Messages:
    1,415
    Location:
    Scottsdale
    Thanks for the excellent info Robert...

    FWIW, my first job with my current employer was in its nuclear services division... I was the finance manager for the outage and inspection business, Nuclear outage cycles are known years in advance -- and outage-related revenue was very predictable. I've been out of that bisiness for about 14 years -- I guess the outage guys are a bit more time constrained now!
     
  11. brianstorms

    brianstorms Member

    Joined:
    Apr 2, 2013
    Messages:
    753
    Location:
    ...
  12. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    Thanks for the direct link. BTW, note that what is declining is usage per household​. Demand overall is still rising, though, because of the rate of household formation.

    - - - Updated - - -

    Nuclear refueling has always been, and still remains, a balletic exercise of logistics. Not only is the plant refueled, but all the maintenance that needs to happen when the plant is off-line occurs, so all the parts, laborers, etc. need to be staged perfectly. The difference now is that the work is done round-the-clock, rather than the single-shift pace more typically used pre-restructuring.

    Utilities have a very odd perspective on business. Costs fall into three categories: (a) capital charges, on which the utility earns a rate of return and increase utility profits, (b) pass-through charges, which don't affect the bottom line, and (c) non-recoverable charges, which are paid by shareholders. Needless to say, utilities always strive to maximize (a) and minimize (c). This is NOT how competitive businesses run themselves, so it's hardly surprising that we've managed to wring huge efficiencies from utility restructuring. Which isn't to say that there are no issues, but it was a good start.
     
  13. omgwtfbyobbq

    omgwtfbyobbq Member

    Joined:
    Aug 24, 2013
    Messages:
    446
    Location:
    Southern California
    I think that's an exaggeration. California got burned, to the tune of ~$40+ billion, and decided to go with DSM and structured contracts rather than rely on pure retail competition, or lack thereof in the case of the Enron precipitated energy crisis. I think a completely deregulated market also makes it harder to implement limits in GHG emissions.

    http://en.wikipedia.org/wiki/California_electricity_crisis
     
  14. rcc

    rcc Model S 85KW, VIN #2236

    Joined:
    Aug 1, 2012
    Messages:
    413
    Location:
    San Jose, CA
    Personally, I don't believe in power deregulation. I think you can size power generation and the grid for peak demand or size it for maximum cost-effectiveness but you can't do both.

    A deregulated power industry will size for maximum cost/effectiveness to maximize profit. That means peak power times (hot summer days, etc.) will result in power costs that shoot through the roof or rolling blackouts if the power can't be purchased and transmitted from other parts of the country.

    Businesses and consumers want power available all the time at reasonable rates. That means sizing generation and the grid for peak demand, not average demand. That means everyone will pay a bit more on average so that when peak hits, the power is available at a reasonable cost. I don't think sizing for peak demand happens unless the industry is regulated.
     
  15. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    FYI, my firm represented several power marketers in the California crisis, and I testified for one of them; my take on the subject is probably different than the official histories. ;-)

    California started with a seriously flawed wholesale market design, which my colleagues saw before they were implemented; the market design, despite these visible flaws, had features that PG&E and SCE really liked, so that's what went in. Enron employees (and others) saw these flaws and drove the proverbial Mack truck through them.

    What really compounded the damage, though, was California's decision to enter into long-term contracts at the top of the crisis, purportedly to spur new investment that would introduce competition. The politicos assigned this task to a complete neophyte, who signed billions of dollars of ill-considered contracts, thus prolonging the economic impacts that should have lasted no more than six months to a period of many years. This also laid the groundwork for utilities to return to the business of long-term procurement and, in some cases, direct ownership of new generation -- reversing the course towards market-tested efficiencies.

    The retail market closure is a different matter. As soon as you get utilities entering into over-priced contracts, there is an incentive for customers to escape to market-priced alternatives. If the CPUC allowed that to occur, it would stick the utilities with the above-market cost of those contracts with no customers to pay, bankrupting them. Thus, you lucky Californians are held captive to your utilities instead of being provided the retail market choice most Americans have.

    Sorry if this sounds bitter, but it's a really sad tale of the worst of both worlds: neither a well-regulated monopoly nor an efficient competitive market.
     
  16. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    If you want stable prices, enter into contracts. If you buy power on the spot market, you are going to see a lot of price volatility.

    You should also be aware that California, like most power markets, does not only run an energy market but also a "resource adequacy" market. This RA market provides a baseline payment to resources to be available, thus driving the capacity supply to be sized for peak, not average. Also, almost all capital investment decisions in California today are driven by the utilities Long-Term Procurement Plans, not decisions of competitive suppliers. It looks much more regulated than, say, Texas or the east coast markets (from Maine to Maryland).
     
  17. Lloyd

    Lloyd Active Member

    Joined:
    Jan 12, 2011
    Messages:
    4,882
    Location:
    San Luis Obispo, CA
    Robert, Thank you, that is the best summary of California's power history yet! $.58 per kWh is too much IMO.
     
  18. Robert.Boston

    Robert.Boston Model S VIN P01536

    Joined:
    Oct 7, 2011
    Messages:
    7,842
    Location:
    Portland, Maine, USA
    When you're paying more per kWh than remote Alaskan communities that rely on diesel fuel flown in on pontoon planes, you know you're paying too much. ;-)
     
  19. rolosrevenge

    rolosrevenge Dr. EVS

    Joined:
    Feb 7, 2009
    Messages:
    1,851
    Location:
    Right behind you...
    More likely because demand is price inelastic for the vast majority of consumers.

    - - - Updated - - -

    California's debacle was a fun two lectures in my power systems economics class that was made much more fun by the fact that it was taught by a cynical libertarian professor.
     
  20. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

    Joined:
    Mar 24, 2013
    Messages:
    4,219
    Location:
    Denali Highway, Alaska
    For a hard datum there, Robert: our fine and not-at-all-lamented-in-its demise local utility was, in its final death throws, charging us $2.25/kWh. Rates had been up to $4.15/kWh in recent years. I'll take the 5th Amendment rather than tell you how many 1st degree murders I'd have committed if I could have been able to pay only $.58/kWh - hadn't seen those rates since the late 90s or earliest '00s.

    And we're on the road system, too..... :(
     

Share This Page