alt Hacker NewsI find that every single time these arguments are flawed, and don't account for a whole host of things.
What's the cost of capital on public providers? And on private providers?
What's the energy mix for each of them?
Are both providers profitable? How profitable are each of them?
Are there subsidies involved? Either directly or indirectly via lower than required fee increases due to political pressure.
Frankly it's tiring to always see the same flawed arguments here.
Replies
Ok so show us a non-flawed argument because from where I sit I’m getting raked on utilities by a private corp.
Additionally the regulations between the two are not the same.
For example, in my home state of Massachusetts, for-profit utilities are required to participate in the state mandated home efficiency subsidy program, MassSave and add surcharges to the delivery charge, to a state-wide cost of $4.5 billion for 2025 - 2027.
Municipal utilities are exempt.
We’re at the bottom of the list on this post, because it’s looking at recent inflation, but municipal utilities cost much less in Mass. But there are many components to this difference.
Some of your questions read to me more like explanatory factors than confounding variables. If cost of capital is lower for public utilities, great, that’s an argument in favor.
I actually think the most interesting factor is listed down in the “about the data” section: “ Most of the gap opened from 2020 to 2023, during the energy price spike: 25% at investor-owned utilities, 11% at public utilities and co-ops. Before and since, both rose at about the same pace.”
So, it might be basically the same story everyone complains about. When there’s a shock, companies tend to quickly hike prices higher than they need to, but after the problem is resolved they’re slow to let prices come down again, if they do at all.
And that detail casts doubt on other explanations because if they were the case we wouldn’t expect to see the divergence be largely confined to the pandemic. There was still a gap before 2020, but it looks like it had been a fairly steady ~1¢/KWh.