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claw-elyesterday at 9:59 PM4 repliesview on HN

I am curious how electricity is priced. Why are more and more utility providers charge based on ‘infrastructure cost’ or ‘fixed platform fee’ instead of usage fee?


Replies

twundeyesterday at 11:17 PM

Within the US, energy prices for are typically split into supply and distribution rates with taxes and fees added to each of these. There are typically a large number of these fees that are passed through to the consumer, but just are bundled together to reduce confusion. An example fee is one for keeping power plants idle as extra capacity for when it's needed. Electricity has a nationwide market with different prices for spot prices vs long term although if you are big enough you can also get a direct contract to hedge your energy supply prices.

The complaint here is that PJM is spending money on upgrading the long range wires and passing that fee in a way that's not calculated for usage but instead it's likely divided evenly amongst member states. If you're upgrading wires in PA why should Maryland pay for that? These would taking in new/higher fees being passed to consumers.

The long range transmission lines are different than short term transmission lines. The long range ones appear someone to hit electricity from a power plant in California for a business in Baltimore.

TrackerFFyesterday at 10:59 PM

I'm not familiar with the Maryland power grid, but I've observed in other places that putting data centers in places with older / inadequate grids can / will require upgrades to handle the new load.

Avshalomyesterday at 10:09 PM

because as part of their legal monopolies they are only allowed to charge a "reasonable" usage fee.

ETA: utility companies make profit on capex, not opex

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CPLXyesterday at 10:44 PM

Here's some very recent writing that will help you understand what's happening:

https://www.organizedmoney.fm/p/how-private-equity-is-drivin...

https://www.thebignewsletter.com/p/data-centers-arent-the-ma...

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