Californian wild fires

[iomegaman]

Everything we did as contractors was perfectly legal, notice that there are always several subcontractors listed in the bid war submittal...its not a "kick back" because the contracts with the subs FOLLOW the initial winning bid, its simply a ridiculous system because the government wanted to regulate "profit" on its contracts...but regulating profit is a fools game, there are a thousand ways to move the money around and call it other things, this is how the rich avoid paying taxes, they simply place money into a different category than "income" and declare "no profit"...

Yes Californias regulations of PG&E is a HUGE part of the issue because they ARE a monopoly and have ensconced laws protecting them from having skin in the game...

THIS IS THE ISSUE...any entity with no skin in the game has gamed the system and will bankrupt the rest of society on its way out.

PG&E has used lobbyist to reduce its skin in the game...until it can cruise past being responsible for many deaths, an entire community burning to the ground and STILL has not changed.

This problem is rampant in our "to many laws" culture...from HOA's to local building code departments...when you have no skin in the game you have stepped out of evolutions path and are now a cancer.

By the way "insurance" has often been used to abrogate "skin in the game" by corporations...in California there are areas now where you cannot even get renters insurance because there has been a moratorium placed on new policies by the insurance companies...which means the insurance companies don't want to have skin in the game.

 

[JohnRoberts]

Everything we did as contractors was perfectly legal, notice that there are always several subcontractors listed in the bid war submittal...its not a "kick back" because the contracts with the subs FOLLOW the initial winning bid, its simply a ridiculous system because the government wanted to regulate "profit" on its contracts...but regulating profit is a fools game, there are a thousand ways to move the money around and call it other things, this is how the rich avoid paying taxes, they simply place money into a different category than "income" and declare "no profit"...

A classic government flawed perception that they can regulate prices, wages, profits, ignoring market forces and remedies. I expect more not less of this flawed thinking from the recent crop of candidates (at least the ones getting press).

Yes Californias regulations of PG&E is a HUGE part of the issue because they ARE a monopoly and have ensconced laws protecting them from having skin in the game...

That is the nature of not only utilities but limited liability capital corporations, otherwise why invest? 

Utilities are a special case because of the massive capital required to build and support infrastructure (like all those power lines), need for vast access right of way across private lend, etc.  They trade accepting strict government regulation in return for quasi monopoly and government assistance.  This does not attract the sharpest minds in the business community expect perhaps at the very highest levels, and maybe not there. The rate commissions regulating what prices the utilities can charge customers should prevent excessive profits. If the utility is hiding and moving secret profits off the balance sheet that seem illegal and criminal. 

I view my local utility and parent company as the gang that can't shoot straight, building a clean coal plant incurring $Bs of cost over runs, that doesn't even burn coal now, because NG is cheaper. The utility regulators won't let them raise rates quickly to pay for the cost over runs, so instead they take on more debt that we will be paying interest on well after I become worm food.  I blame both the utility and regulators, the federal government was also involved in pushing the clean coal before the technology was ready for prime time. Still not cost effective apparently.

THIS IS THE ISSUE...any entity with no skin in the game has gamed the system and will bankrupt the rest of society on its way out.

skin in the game  is a good thing

PG&E has used lobbyist to reduce its skin in the game...until it can cruise past being responsible for many deaths, an entire community burning to the ground and STILL has not changed.

It seems the CEO resigning and declaring bankruptcy is a negative consequence (perhaps not your Shakespearian pound of flesh). But they declared bankruptcy before in 2001. If there was criminal responsibility for the deaths, I'm sure they are not shielded from that. While the government may allow them to kill birds with their wind turbines, I don't think that extends to killing humans.

This problem is rampant in our "to many laws" culture...from HOA's to local building code departments...when you have no skin in the game you have stepped out of evolutions path and are now a cancer.

the problem from too many (bad) laws is the ease with which selective enforcement can use the laws to punish and/or gain influence. If we lie to congress we go to jail, but they routinely lie to us. 

By the way "insurance" has often been used to abrogate "skin in the game" by corporations...in California there are areas now where you cannot even get renters insurance because there has been a moratorium placed on new policies by the insurance companies...which means the insurance companies don't want to have skin in the game.

That is an example of free market forces saying no mas to loony tunes governance. The government has long distorted market forces by subsidizing flood insurance, fire insurance could be next, but IMO shouldn't be.

BTW I have heard of high end insurers proactively protecting high ticket homes against fire damage in high risk areas. 

JR

 

[PRR]

> Why are all these problems limited to California? (And to some extent NYC).

You just don't read all the local news. CMP (south Maine electric) is in deep doo-doo with some customers because of apparent billing errors (following SmartMeters). Also reaction to storms, including a total crash of their SmartMeter system in the first hours of a storm (tracking meters is a great way to know what's out). Closer to me, Emera (Hydro, Suzy, or whatever their name is by the time you read this....) is clearly burdened by legacy wire practices, fast-growing trees, and rising expectations. There's talk of selling it from one Canadian to another. There's talk of the State buying one or both (bad plan, but we'll never get around to it).

For decades LILCO was the shame of Long Island NY.

The early history of electrification is FULL of companies started with high hopes and gone into trouble, who had to be bought-out by some bigger/stronger operator.

> PG&E is a regulated utility

A regulated utility is a very strange duck. Have you read the texts on regulatory theory, practice, and law? It is easy to make a simple cost-split totally incomprehensible. And it is not a fair fight: the regulators meet a few hours a year for token pay, the utility lawyers and accountants are working full-time every day and there are lots of them. If you look back at the California wholesale electric exchange it sounds like the Harlem Globetrotters playing against 3 year olds. (Similar elsewhere, but Calif is better reported.)

 

[dogears]

I don’t disagree.. The difference is scale. There’s a difference between some billing and wholesale grid collapse. Yes, I know this happened in NYC recently, and yes, I know brownouts and blackouts aren’t all that rare.

I have actually read a bit on utilities. I work in the industry, and get a little geeked about power generation. More on the mechanical side but the market side is fascinating as well.

The real fun is going to come when/if  renewables or any inverter based power become significant. Frankly our entire power pricing mechanism doesn’t really seem to work for significant utilities with zero marginal rate and zero ability to dispatch. I suspect it’ll take a large scale blackout to find this out, where assets that have been mothballed for lack of run-time are needed in an emergency. And then the demand will be to *fix it* ie regulate, and ultimately the consumer will lose.

This map is pretty interesting. I’m sure there’s lots of facets to each price differential. Wonder how much of that is artificial / regulatory burden vs natural cost of electricity.

https://www.globalenergyinstitute.org/average-electricity-retail-prices-map

For me, the objectionable thing is the idea that PG&E is at fault for wanting to make money. That’s just short-sighted, it’s not even half the story.

 

[JohnRoberts]

There is a lot of fuzzy thinking about future of power generation. CA seems to be a leader in this fuzz fest.

The wild fires are not necessarily due to this new (green) thinking, more likely classic old school mismanagement.

JR 

 

[PRR]

> This map is pretty interesting.

Thanks. I knew my niece in the NorthWest, and folks in TVA territory, paid much less than we did in New Jersey. OTOH folks in Maine say electric costs hurt their business, but we are cheaper than the rest of New England, the same color as NY, and cheaper than Calif. "Same" as NJ, though I observed a penny more when we moved. This supports my feeling that we should pay more for juice here in return for stronger wires and massive tree-cutting (also Jeep-guards- Jeep-wrecks are a close #2 cause of outages).

Yes, very small wide-spread power sources upend the classic tree-form distribution and economics. I have even fantasized a simple plan to put a GMC Diesel every few thousand feet around my peninsula, staggered so all run one hot day each summer and only one runs on a mild midnight. The wiring would be very different. Of course this specific plan replaces heavy transmission wires with frequent runs from a fuel-truck. Wind and solar work in bright breeze but would be a parasite at this moment (dark and calm).

Fusion is only 10-30 years away. I know, because it has been 10-30 years away all my life.

 

[JohnRoberts]

> This map is pretty interesting.

Thanks. I knew my niece in the NorthWest, and folks in TVA territory, paid much less than we did in New Jersey.

IIRC northwest enjoys hydro-electric low cost benefit.  I think some bitcoin farms were located there to take advantage of cheap electricity.

I was almost afraid to look at MS, but not as bad as when I lived in NE (we still have that clean coal boondoggle to pay for eventually).  I vaguely recall some energy policy in NE where they have to purchase all (green) energy available even when way more expensive than buying cheaper hydro generated energy from canada.  :

OTOH folks in Maine say electric costs hurt their business, but we are cheaper than the rest of New England, the same color as NY, and cheaper than Calif. "Same" as NJ, though I observed a penny more when we moved. This supports my feeling that we should pay more for juice here in return for stronger wires and massive tree-cutting (also Jeep-guards- Jeep-wrecks are a close #2 cause of outages).

Yes, very small wide-spread power sources upend the classic tree-form distribution and economics. I have even fantasized a simple plan to put a GMC Diesel every few thousand feet around my peninsula, staggered so all run one hot day each summer and only one runs on a mild midnight. The wiring would be very different. Of course this specific plan replaces heavy transmission wires with frequent runs from a fuel-truck. Wind and solar work in bright breeze but would be a parasite at this moment (dark and calm).

the system is not really intended to let consumer pump excess solar power back into the distribution lines cost effectively, another government distortion because it feels good. Making them buy back electricity when nobody needs is it not good business for the utilities. Hard to charge up the Tesla from solar cells in the daytime  when it's miles away parked at work.  When Elon puts solar panels on the Tesla roof, people will fight for parking spots with sunlight.

Cost effective local battery storage is not crazy except for the last century battery technology that promised vast improvements any day now for decades.

Fusion is only 10-30 years away. I know, because it has been 10-30 years away all my life.

yup..  "promising" technologies, that are big on the promise. 8)

JR

 

[PRR]

> some energy policy in NE where they have to purchase all (green) energy available even when way more expensive than buying cheaper hydro generated energy from canada.

NIMBY!!

Massachusetts and Quebec want to deal dollars for juice. Quebec has gone from a backward cramped electric situation to being flush with hydropower. They restricted export for a long while, but now are ready to deal.

How to flow juice from upper Quebec to Boston? Long wire through VT, NH, or ME. One said "No." One said "Ummmmm, no." Maine is in the "hmmmmm..." phase and the state is leaning to "Yes". But the route (any route) runs through much beautiful country. A LOT of folks are against it. The pot was sweetened. Still didn't please many folks, and the electrician union is now loudly against (some palm didn't get the grease?) FWIW, Maine gets no electricity out of this, and _I_ think the proposed pay-off is on the low side of fair.

Of course if Quebec Hydro reduces frantic building of overprice wind (we have that already, maybe credited to Boston), maybe that's good.

Up here, every civic facility from schools to the former dump is sprouting solar panels. Schools are semi-synergistic, the peak load is middle of the day. I think the dump project credits city hall but the fit is less good. These can only work with a strong and more-flexible baseload generator. We are getting there by moving from coal to oil and some frack-gas.

Meanwhile in a different universe: we keep piloting projects to scorch wood-chips with wood fires here, to ship to Europe where they burn it in coal-burners and call it "green". If that's such a good idea, which isn't Bangor Hydro burning Maine trees directly? (BH outgrew its hydro roots decades ago, and recently the dams were removed.)