The Interaction Between Capacity and Dynamic Pricing -- Part 2

Posted on January 08, 2013
Posted By: Jerry Watson
Time of Use (TOU) pricing is considered by many to create fair and equitable method to tie capacity and energy charges to customer usage, others contend the answer is real time dynamic pricing. The argument for these is relatively simple, high prices during higher demand will reward those reducing capacity consumption during these times while penalizing those that take no action. It is a simple but valid premise. It is unfortunate that the electrical energy sector is not equally simple so that this simple solution adequately solves the problem. The problem with Dynamic Pricing is it creates an inequitable risk transfer. The issue with TOU prices is they may or may not be fair depending on the rate structure and they still socialize capacity cost.

For starters, what is an equitable price for the electrical energy consumed? It is one, or a combination of parameters? The current answer and possibly the worst is real time dynamic prices at the retail level. Real time pricing creates more questions than answers: What parameters should incorporated into the real time price? Should it be the spot price? The system maximum cost, or system average cost? The spot energy price and system average cost may not even be the same order of magnitude. System average cost is logical factor of fair and equitable that seems ignored by all. It rarely even used as a discussion point in the debate over real time pricing.

If seems forgotten the purpose of all of these schemes is to subject each customer to the cost of the capacity and fuel they are using in a fair and equitable fashion. The goal should not be the imaginative use of the latest technology and gadgetry.


Fairness of current fixed price rate structures is questionable since load profiles follow the economic status of customers to a significant degree. Affluent customers, tend to use disproportionately more comfort cooling with higher loads during peaks compared to flatter profiles of those with lower means. In simple terms, in our current fixed priced energy system the lower income customers subsidize capacity for the higher income customers since capacity costs are socialized across all customers. If fairness is a goal our current structure is lacking, the status quo is an easy but poor choice.

Regressing back to capacity, generation capacity has a finite value in the range of $6-10 per Kilowatt (KW) month. Dollars/KW month is the most common capacity product measure. Using the high end of capacity cost a 10KW residential customer doubling up to 20KW uses an additional $100/month in capacity. The cost of the capacity reflects the overnight cost of the supplying resource. Capacity is real and does not exist in the moment alone. The common error is to envision schemes like Critical Peak Pricing (CPP) that collect for capacity based on short intervals as if it did exist in that moment alone. The provider has the capacity year round, often for many years so the provider's commitment is $1200/Kilowatt Year (KWY) for many years. If capacity is required for only a few hours a year, it makes those Kilowatt Hours (KWH) very expensive. As an extreme example, if the 20KW is needed twenty hours per year and only 10KW all other hours those twenty hours have a $60 per hour capacity cost that is socialized across all customers.

It may well be worth the $60/hour to some customers and not to others. If a 1KW of draw is used for only a single hour during the year in theory that KWH cost somebody a $100 plus the fuel to convert it to energy. Scaling up to MWHs it is $100,000/MWH power which is 1000 times higher than typical $100/MW residential rates. These numbers ramp up as capacity factor drops and this relationship is used to justify all manner of scheme. It is arguable whether reality matches the possible number play, but it does illustrate the kind of incentive needed to invest in capacity without some measures of surety.

Capacity demand is not quite this simple, the big capacity driver "Comfort Cooling" KW draw is limited by air-conditioning (AC) unit size. What happens during Critical Peak Periods based solely on load is not an increase in individual AC KW demand as used above for an example, it is rather a decrease in off cycles or more simply stated an increase in AC capacity factor so during any given moment more members of the entire AC fleet are service. On the hottest days almost the entire customer AC fleet will likely be in service for several hours nonstop. The customers used that same peak KW demand as on many other days, but the system had a demand averaging effect. Unfortunately as temperature climbs the system demand moves closer to the sum total of all customer AC demand.

Time of Use Rates

The TOU concept is sound as long as the rate scaling is equitably. TOU use rates without random Critical Peak Pricing can be fair and equitable. However, there is a wide chasm between the plans offered by IOUs, Coops and Munies. TOU rates are sliding rates based on time of day and time of year. Assuming future possibly mandatory plans will look like current voluntary plans that several IOUs offer the IOU programs appear punitive to ratepayers. The following prices were pulled from an IOU's TOU sight other than being rounded and converted to percents from cents per KW listed on the site. The IOU's fixed retail rate was just below $.10/KW. Off peak (lowest) prices were slightly cheaper at 89% of the fixed price rate. The shoulder hours of the peak period were 93% of the fixed. The peak hours of peak periods were 158% of fixed with random Critical Peak Periods at 424% of fixed. The maximum theoretical saving by using only off peak power is 11%. It is immediately obvious that ratepayers will not be saving much. A typical load profile is peak usage of around twice of off peak usage. Looking at much more desirable flat load profile with the 1.5% CPP allowed in the rate structure the electrical usage will cost 105% of fixed. The rate becomes break even to fixed at .5% CPP. The almost unattainable, flat load profile with no CPP yields a whopping 2% saving. A more typical two to one, peak to off peak ratio, would result in around a 30% increase in electrical energy cost for the year.

It is obvious the IOU has stacked the rates in its favor. The off peak and shoulder hour incentive price is far too high to be fair or equitable to ratepayers. It clearly shows that Investor owned utilities are not in business to serve customers as the first order of business. IOU's like all, for profit investor owned businesses exist to increase shareholder wealth. Their actions are predominantly prudential in nature and as a whole are skewed towards doing the most possible for the bottom line, which is exactly as, it should be. The IOU's fiduciary responsibility is to its shareholders not its customers.

What is sad is the Public Service Commission did not fulfill its fiduciary responsibility to the citizenry. Approving this rate structure is proof that a group can be clueless and math adverse and still be Utility Commissioners of one of the US most populous states. In defending them, had a water bug been at risk, rather the citizenry, they would have assuredly used greater care.

Ironically, this same state commission denied approval to another IOU for a similar structure last year seeing little if any positive impact to the ratepayers. At least they are inconsistent in making poor decisions and occasionally make a good one.

On the brighter side, it is a challenge to find a Cooperative that's TOU rates look anything like that of the IOU source for the above. The "not for profits" are offering fair and equitable programs with an opportunity to reduce ones energy bill and the Coops future capacity needs. In studying several Coop offerings, the peak was around 6 to 8 hours week days only. All other was time off peak at 40-50% of the fixed rate far below the 93% or 89% of fixed rate for the IOU plan.

There is excess capacity during all nonprime peak hours so capacity should have little value with capacity cost recovery accomplished during the peak hours. The Coop's limited prime peak hours occurred Monday-Friday and were 140-150% of the fixed price very similar to the IOU. A flat load profile would reduce energy bills 40% and following the normal pattern would result in charges equal to fixed prices. Parity with fixed rates for typical customers nicely defines a fair and equitable rate structure.

The Coops definitely own the high ground when looking at these programs. The Coop programs improve equity among different customer socioeconomic groups since the flatter load profiles of low-income customers will result in a lower electrical energy bills compared to the fixed rate coupled with proportionally higher bills for the higher income rungs and their associated larger peak demands while remaining revenue neutral to the Coop.

TOU rates can potentially make large leaps towards fairness and equity while adding incentives to use energy during low demand periods. However, TOU is not a solution in and of itself, improperly scaled it can be used as chicanery to veil a rate increase.

TOU although a positive step still suffers from the averaging effect addressed earlier. Capacity cost are still socialized across all rate payers so lower use and flatter load profiles customers still partially subsidize capacity for the peakier customers. The most equitable way to charge for capacity is to charge for capacity rather than a skewed energy price derivative.

Real Time Dynamic Pricing

The impacts Real Time Dynamic Pricing are difficult to understand, for clarification an imaginary Investor Owned Utility (IOU) will be used to demonstrate the issues with real time dynamic pricing. The imaginary system has a 10,000 MW peak system demand. It has 7,000 MW of base load generation that all in is $50/MWH combined 3,000 MW of intermediate with an all in of $70/MWH. Its final 1,000 MW is diesel peakers at $400/MWH (13,000 heat rate $4/gallon). The system is 11,500 MW to provide a 15% reserve margin. However, a 500 MW coal unit is off to repair a tube leak leaving only a 10% reserve, so 500MW was purchased day ahead at $100/MWH. Carrying the entire reserve requirement from base load and running the diesel peakers flat out the and including the purchase the system average is cost $91/MWH significantly lower than the $400/MWH cost of the peakers.

It is hot and with a minimum of excess generation available, and a trading firm is doing some buying so spot is $1500/MWH. Then a 1,000 MW base load unit has a step increase in furnace pressure and trips. The short fall is purchased on the spot market at an average of $2500/MWH with price ranging from $1500 to $4000/MWH now the system average cost is $336. This buying has further pressured the spot market any more energy will cost $4,000/MWH or more.

The question to answer is what is a fair and equitable real time price? The $4,000 spot price or the $2500 actually paid for the previous block or would the system average of $336 still be a fair number? The position opposed here is the direction that we seem to be heading, that the $4,000 spot is the fair price to convey to ratepayers as real time dynamic pricing.

Would it still be considered fair if it was added that a savvy trading firm got wind of a possible generation issue at a competing firm and made a speculative run on the market driving prices up from $400 to $4000/MWH and is now selling that energy to the our system at an average premium of $2,000/MWH. If the $4000 spot price is used for the real time price, who should receive the $3664/MWH difference between system average and spot price? Would it still be fair if it was added the our imaginary utility was offered an additional 1000 MW the previous day at $150/MWH for a standard 16 hour peak block but declined deciding to pass and run their own peaking units four hours across the peak and let the day play out.

How about the unit on forced outage, is it relevant that the failed tubes having been thinning for a decade and the utility chose to postpone their replacement from the previous spring until the approaching fall? Is it relevant that what seems like a series of errors is likely increasing the quarterly dividend and raising stock prices for the imaginary utility? This is a simple scenario not unlike the real price drivers of weather and equipment failure, what aspect of this did the retail customers have any control over?

It is simplistic to think only in terms of demand or supply; it is not fair to the retail customers to assign them all system risks in the name of valid usage incentives. The only thing they control is their demand, which does not justify them bearing of all risks in the form of electrical energy price spikes. It is neither fair nor equitable to assign them any cost other than those created by their own demand. Ratepayers should not bear the consequences of risks associated with decisions made by others, including the decision not to add capacity or demand side control measures to balance electrical energy supply and demand.

In closing: The industry has a long-standing model for equitable cost assignment, it is the one used almost universally already for industrial customers. The user has two charges one for the capacity used and the other for the energy used. We should use our smart technology to further this functional model to all customers rather than create new elaborate schemes that indirectly charge for capacity through energy price spikes.

Authored By:
Generally, people tell about what they are now, my history is more about the journey. This autobiography is long and detailed but is of course optional reading, it is as much personal as professional but I am not selling anything or using to try to advance my career so here goes. I am Twenty-nine year veteran of the power sector, and have enjoyed it. Good fortune has smiled on me

Other Posts by: Jerry Watson

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January, 10 2013

Len Gould says

Excellent article! Really useful discussion. In my design of IMEUC I searched the literature for an alternative to the SMD (Standard Market Design) which carries all the faults you ascribe to the Dynamic Pricing model, but could find none. You may have actually found it, by recommending separate charges for capacity and usage. I'll need to think this through.

One issue that strikes me immediately is deciding what the time window to compute capacity usage should be. For Ontario industrial customers (at least 30 yrs ago, last time I was involved), the capacity payment was based on peak usage adjusted to 90% PF for each month, with a sliding carry-forward from previous two months. Energy charges were then very low, in the range of negligable. Since then, I think the fixed costs of distribution have been sepsrated out into a flat charge-per-month per kw service, so have likely been removed from the capacity charge. I think that using such a long time window gives away a lot of the potential benefits of the system, eg. if for any reason the peak usage goes unusually high early in the month, then there is no reason for the customer to do any further worrying about their on-peak usage for the remaining days of the month, which is a lost opportunity for the system.

The other issue is, in areas where power is supplied by an IOU (rather than a co-op), who decides what the capacity rates should be, and on what basis? Using SMD on the wholesale market, though perhaps slightly overcharging during emergency peaks, at least allows rational rapid adjustment to changing market conditions, reduced rate-latting lawyer fees, reduced potential for political influence.

Overall, excellent.

January, 10 2013

Len Gould says

That's of course "peak hourly usage in the month" was the system in Ontario.

January, 10 2013

Malcolm Rawlingson says

Agreed- this is a very interesting and informative article. Well done.

I have for many years been puzzled by what drives people to reduce electricity consumption. Of all the things I purchase in a year electricity is the single most useful and at the same time cheapest product. I can understand why Governments and distribution networks would encourage people to do that but why would anyone invest effort and money into reducing their usage when the payback is so small compared to other things people spend their money on. I have seen people fit out their entire house with three dollar mini flourescent light bulbs instead of 25c incandescent bulbs with absolutely no hope of ever recouping their investment in saved electricity.

They would save vastly more simply by driving their vehicles a little more gently.

Personally I have no further interest in energy saving devices or time of use rates. I have done all the energy efficiency things over the course of my life and few have really made a hill of beans difference to my finances. If my electricity bill doubled it would still be one of the smallest expenses in running my home.

When appliances reach the end of life I will look for the best value not the most energy efficient.

As the wise man said - Don't Worry - Be Happy you'll be much better off.


January, 11 2013

Bob Amorosi says

Very good article and great comments from Len and Malcolm too.

I find it intriguing that industrial customers have historically paid for both energy used and for capacity used. In simple terms they pay prescribed rates for energy used over their billing period, just as residential consumers do, but also have penalties for excessive (capacity) watts drawn during temporary periods over their billing period. This article among other things explains why it makes sense to charge for both energy and capacity used.

Gentlemen, I suspect you all realize that with smart meters appearing on most residential homes now, it is technically possible for utility companies to measure relative capacity used by residential customers, in addition to energy used. Granted it would massively complicate and increase the volume of data a utility company would have to gather from the smart meters, but it is possible.

The missing link for residential consumers is their ability to monitor and track their own capacity usage. Who would even care to monitor how many watts they are drawing on a continuous basis in their homes? Of course no one is, but gentlemen, it should be obvious that computer chips can do this very easily today, and do it at a low cost, and require very little energy to do so. Indeed, not only is it feasible to monitor whole house capacity draw through the utility's smart meter, but also monitor individual loads in a house by equipping individual load circuits with “miniature smart meters”.

If this sounds expensive to outfit a house with all this metering technology, I have news for you. The hardware is already available to do this in consumer product forms. Just have a look at and do a search on energy monitoring products.

Obviously consumers don't have much incentive to buy all this technology to outfit their homes, but they would if utility companies started charging for capacity usage in addition to energy usage. Implementing this technology for residential consumers would also educate the public much better on the difference between energy used and power demand in watts by any load in their house, or by their whole house.

January, 11 2013

Harry Valentine says

Time of Use (TOU) power pricing is the only sensible method by which to sell electric power . . . and let the market set the prices. An all-day flat-rate system may win votes over the short term . . . . . and causes distortions in the power market. The usual result is insufficient generating capacity. TOU power pricing provides the means by which to accurately assess market demand for electric power.

January, 11 2013

Len Gould says

Harry, TOU pricing is the worst possible use of modern electronic metering systems, several variants of Real Market pricing provide much more logical incentives for consumers to act for their own and society's benefit. Some means of charging directly for capacity use, as Jerry points out, is necessary, but TOU pricing simply slightly changes the parameters of regulated pricing, leaving the lawyers and politicians still in charge. A true market system would save a lot of money for all consumers. In fact, better than TOU pricing would be a simple flat capacity charge with each consumers making a one-time election of their peak requirement and the meter simply enforcing the election.

Capacity pricing really works. Even 30 yrs ago I was able to financially justify to our directors investment in a large ice storage system and a switching system to allow out 800 kw diesel emergency generator to run during the short period per month when our peak would otherwise have been set. A home cooling system with 2 cu meters of ice storage and a glycol loop into the home could easily and cheaply shift all cooling off-peak at very low relative cost to the owner, but as Malcolm points out, current rate structures for residential simply cannot justify it.

For example take a present typical home with a 3 ton A/C unit running 25% of total time 8 months per yr, uncontrolled except by thermostat. 540 kwh / mo.

Assuming $0.10/kwh regulated energy-only charges, it is costing the homeowner about $54 / month for the 8 mos. There is no financial incentive to shift the load off-peak.

With a TOU system, 135% on-peak 85% off-peak, and 33% usage on-peak, it would cost the homeowner $24.06 on-peak and $30.30 off-peak, total $54.36 / mo. By shifting peak usage to off-peak, the homeowner can save $24.06 - $15.15 = $8.93 / mo for 8 months = $71.44 / yr. Maximum rational investment with a payback of 5 yrs = $357.20, not enough to justify an ice storage system.

With a proper capacity-priced system charging eg. $0.033 / kwh, plus $12/kw peak capacity per month, the cost would be $54.00 per month. By shifting peak usage to off-peak, the homeowner can save the entire capacity charge of $36 / mo for 8 months = $288 / yr. Maximum rational investment with a payback of 5 yrs = $1440, enough to justify and pay back an ice storage system.

Now perhaps it could be argued that a TOU system shouldn't use a rate structure which doesn't penalize the free riders (eg. if system left uncontrolled, the monthly bill is unchanged from a simple regulated structure), and the incentive under TOU would be the higher than my example, but then the same argument for an increased incentive could also be applied to the capacity-priced system.

January, 11 2013

Len Gould says

And I know, many readers will notice that the capacity-priced system is not revenue-neutral for the utility. I know, and perhaps if the utility cannot re-sell the excess peak capacity to another market, some compensation should be considered for a few years. But in the longer term, as greater percentages of load are shifted from expensive peakers to cheaper baseload units, the utility's finances should remain viable (though agreed their gross receipts will still drop, making the CEO's less important-feeling and influential, a factor which no doubt fuels much resistance to these strategies.)

January, 11 2013

Bob Amorosi says

Nice analysis Len, I love your example of saving money wih a "proper capacity-priced system".

January, 11 2013

Bob Amorosi says

BTW for those techies like me that are interested, the company Maxim in California makes dedicated energy measurement microchips with the embedded software necessary to make those metering devices I hi-lighted above. They are less than 3 bucks in quantities of 1000. For less than $15 in total hardware, one can make an energy monitor product than can be networked to one's Home Area Network. They locally store energy consumption in their on-chip memories, and can be used to track demand in watts quite easily over a HAN…

If there was enough consumer demand for these monitoring devices, you would see every appliance maker designing them into their products as embedded features, and homebuilders putting them into every new home’s electrical panel or wall outlets.

I predict when you go shopping for new appliances Malcolm in perhaps the not-so-distant future, you may just encounter some with these energy monitoring features built in, with the ability to remotely tie them into utility demand response systems or your own home computer network.

It promises to be an interesting and exciting future for even more high-tech goodies in consumer products for energy usage and monitoring.

January, 11 2013

Jerry Watson says

Thank you all for taking the time to read my article, and the very interesting comments.

As several of you have noticed this design if implemented would likely be somewhat of a windfall for the home automaters. It would also likely improve markets for home energy storage using EV batteries, Ice storage air conditioners, and hot water storage heating. Solar PV would also benefit since it aligns nicely with cooling peaks. I see all these as positive effects.

As Len pointed out, I believe it would be a gentle evolution with predictable appropriately scaled rewards for investments made by the end users and the system.

Right or wrong, I see dynamic prices as introducing additional chaos into the system making investment difficult and using fear of volatility as its principle motivator. Initially, it will lower prices reducing incentives only to eventually reclaim the saving through price spikes. Even once the volatility becomes a factor those considering investment will have to predict the future as part of the investment decision.

Charge me for my capacity and next summer I will likely install an Ice storage air conditioner. Once the novelty wears off they should be pretty cheap since they essentailly add a box to store ice in on top of pretty standard components.

January, 11 2013

Len Gould says

I propose to you Jerry, that the volatility which you fear is pretty much entirely the product of traders playing on the edges between producers and consumers. If the market (IMEUC) provides no space between producers and consumers, then a stable market should result.

January, 14 2013

Jerry Watson says

Len, I agree for the most part since volatility was minimal before FERC 888, but I assume trading firms are market factors to be dealt with, traders will argue they increase liquidity thereby improving the market and reducing volatility. FERC order 888 really created “Electrical Energy Trading” and its volatility. Price caps were added, out of necessity, as a band-aid to limit volatility. Overall, the value added by speculative trading is arguable and may well be less effective than the old asset based marketing of system operators trading directly, but I do not see our current version of electrical trading going away.

More conjecture on my part, but the reason I think speculative trading is a problem is it is allowed to continue to close to delivery of a non-storable product and since they are so few non-storable products it is rather unique to electrical energy trading. We are sort of using a one size fits all approach.

It would be another rule and I am likely missing something, but if speculative trades were prohibited within one week of delivery it would be a new game, this would allow traders to create liquidity in long and short -term down to a week. However, it would prevent traders from attacking like hungry sharks real time and purposefully overheating the spot market based on “readily available intelligence” which as a trader I jokingly called smelling “blood in the water” such as missed weather forecasts equipment failures, and record temperatures.

My conjecture is limiting the last week to schedule balancing with generators selling non-committed generation and load serving entities buying for noncovered loads would considerably stabilize the spot market.

All this goes to the reason I oppose real time retail dynamic pricing in our current US market design because to quote a John Wayne movie line, “Anything goes wrong, anything at all, your fault, my fault, no bodies fault, it don’t matter,”... the retail customer is going to pay.

January, 15 2013

Len Gould says

Mostly agree with your critic of trading, Jerry, though I'd re-direct your last sentence to clarify that the statement "the retail customer is going to pay" is true in every system and every market design, not only dynamic pricing. I suspect that a market where traders can hide their activities behind retailer fronts is probably the worst potential exploiter over the long term, though short-term dynamic pricing may impose some scary spikes. Personally, if I had access to a system with dynamic pricing, I'd simply program my meter to entirely disconnect the entire premises if the controller had failed to purchase sufficient options in advance at a fair price and the market price exceeded say $5.00 / kwh or something. The market would then very soon learn that there would be little benefit trying to squeeze the price so high, because demand would then dramatically drop from customers imposing automatic blackouts on their premises at random (and unpredictable) prices near the peak.

I know, many old-timers here will complain that "continuous supply at affordable prices is what the old regulated model guaranteed, why change that?" and my tendancy is to agree. HOWEVER, IF the system is going to change to some alternative "free market" system, THEN I require that the new market must not provide any space for traders to exploit customers. Hence IMEUC.

January, 16 2013

Jim Beyer says

Bill Payne should be banned from Energypulse.

January, 16 2013

Len Gould says

Yeah, I wish he'd tell us what his goal or aim is in doing these dumb posts, so we could make sure it never happens.

January, 17 2013

Bob Amorosi says

Looks like Bill Payne has been booted off this EP thread today, you guys got your wish. Glad to see it too.

On the subject of the article, it would have been a massive waste of money to have deployed all the smart metering and smart grid technologies already in the field if the system doesn't eventually change to some sort of “freer” market system. Otherwise the money could have been better spent on simply building out the grid as was always done before to maintain capacity margins and reliability as overall demand grows. Granted the integration of renewable generation into the grid would need some added technology to manage, but to the uniform regulated prices of the old market system, it would stay hidden from us consumers.

So eventually the market system should / must evolve into to something new. I for one hope it is IMEUC or something like it. :)

January, 19 2013

Don Hirschberg says

International Military Education and Training (US DoD) International Molecular Epidemiology Task Force Group (Mexico)

IMEUC? International Molecular Electronics Technology Corporation Individual Military Education and Training Program International Military Education & Training Program Infosoft MMS (Multimedia Messaging Service) EMS (Enhanced Messaging Service) Testing Suite (software) Integrated Meteorological and Environmental Terrain System Integrated Meteorological System Integrated Meteorological System - Light Institute for Middle East Understanding

January, 19 2013

Don Hirschberg says

We typically use about 17,000 KWH per year in our all-electric house. That's about $1700 at our 10 cents per KWH rate. How much difference could there be among the various billing schemes?

January, 19 2013

Len Gould says

Independent Market for Every Utility Customer, Don. It's what should happen IF your system is privatized, money is spent on electronic meters, and regulators decide they want to pay incentives for demand control and self-generation either solar or micro-CHP. All these actions normally cause prices to rise (eg. here in Ontario we've gone from about $0.05 / kwh to well above $0.10 / kwh in about 15 yrs of privatization). The IMEUC strategy accomplishes all these goals while ideally offering customers access to the wholesale market price of baseload generation. It also provides accurate benefit according to actual value for demand control for every customer willing to take any steps, rather than some regulators estimate provided only to large industrials, and eliminates the "free rider" problem inherint in most demand control strategies.

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Part 2 - Market Operation

January, 19 2013

Len Gould says

BTW, if you want to find out how much you would be paying for electricity under IMEUC, just ask your utility how much they would like to pay you for any excess generation you may have on a solar PV installation. They usually offer you the average baseload wholesale market price, perhaps 2 or 3 cents / kwh. Of course you'll still need to pay a separate flat rate for distribution, usually (eg here in Ontario) a fixed monthly fee that works out to about 5 cents / kwh.

January, 19 2013

Don Hirschberg says

Thank you Len. In my case this scheme makes less sense than a hemorrhoid transplant.

January, 21 2013

Len Gould says

It's interesting, Don, how you guys in the US demand your rights to a) buy your electricity from a government-run monopoly which charges you, at minimum, a fair bit more than a logical competitive market would, yet b) buy your health insurance from a bunch of competing private corporations who run large advertising, qualification and elegilibilty overheads.

Pretty much the opposite of every other rational OECD nation.

January, 22 2013

Jerry Watson says

Len, A very large chunk of the US population has socialized medical in the form of Medicare and Medicaid.

The irony and humor of socialized medicine is just how many of the most vocal opponents to it seemed to be older citizens almost certainly on Medicare themselves seemingly lacking the depth to realize they already have the dreaded and feared socialized medical care. They seemed certain about two things, one they did not want any tampering with their Medicare and that socialized medical care would not and really could not work in the US.

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