Investor-owned utilities charge 23% more for electricity than public providers

InsidiousWombat

Privatization of utilities was always bad idea. We had a lot of it in Poland, mostly driven by "govt owning it is communism, we want to get away from what" and it just made it near universally worse

appstorelottery

I remember when water was privatized in Brisbane, Australia - instantly noticing the jump in my bill. It's clear that privatizing infrastructure like water & electricity doesn't benefit consumers (unless they are somehow investors). I understand that Amsterdam is privatizing water as well. But what can be done about this? Is the only path as consumers is to become ruthless capitalists for our own survival? I wonder where this cycle ends?

yttrium

Utilities should at minimum not have a profit motive involved, but the fact that we've been so happy to deliver vast profits to shareholders instead of proofing our grid has been a real tragedy.

benji-york

Alternate headline: "Public utilities subsidize 19% of electricity charges."

Pragmata

I 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.

ianm218

This feels like kinda of a useless comparison if we don't know about the tax rates they pay, cost of capital, adjusting for geographic location and local regulations etc. I.e. the largest increase was seen in NY where it is really expensive to do anything and high taxes.

petcat

Crazy how cheap the electricity is across the board. EU average is almost double, 40 cents per kwh

bix6

One interesting thing I’ve learned is that the utilities will manipulate projects to earn more take. So for example they will add a decommissioning in and then get regulators to approve that and now boom utility co snuck another 1% on the take. The bonuses that the C-suite execs of a public monopoly are getting… unconscionable.

CGMthrowaway

What was the hypothesis here, did we think they would be charging less?

solfox

This whole "but government is inefficient" argument has never convinced me. Our local electric provider has as bad or worse bureaucracy and ever-increasing rates. Bureaucracy is just a symptom of aging human systems, and it can be fixed. Monopolies that serve the public good should never been profit driven, full stop.

mentalgear

That's why essential utility or otherwise operator that functions essentially for the common good / people must be in public or public-private hands with strong regulation on what is allowed and what isn't.

adelekeabdulgan

that means "23%" profit for the people who dropped capital for potential returns.

virtualritz

Surprise!!! That reminds me, my hometown, the city of Hamburg, bought back the public utilities it had privatized in the 90's, following a public referendum, in 2014. I recall that one reason was prices for electricity and gas going up after the privatization. Go figure.

metalliqaz

Is anyone surprised by the profit motive?

jacquesm

Now look at how much they invested in keeping the infrastructure up to date. The ones I know about are very good at the rent seeking portion but when it comes to (preventive) maintenance and capacity planning they are terrible.

chiatruntime

In this thread: a bunch of comments that don't understand that if you want more of something (power, food, housing, videos of cats, whatever), by far the best way to get it is to give the people providing the stuff more money.

infecto

This is a slop website selling a product. It does not appear to adjust for any of the things that matter. Taxes, cost of capital, generation mix, etc. I think the “insight” is impossible to call an insight with the lack of real modeling.

javcasas

Do we also have a study on the quality of service provided by investor-owned vs public providers? I mean, both sides claim to have the better quality, so let's see who actually has it.

pandinus

I live in a counter-example. The only water and electric utility available is city-owned and I pay triple the amount of my sister and her family that lives in another city yet has 4+ private utility companies all competing with each other. And she has a house more than twice the size of mine! Bring on the competition!

nodrog3000

It is naive to think that the government can just be 23% more efficient at getting you electricity. This excludes account for tax exceptions, cheaper financing or even government financing. The government is a monopoly and not allowing competitors in with legislation and using tax dollars to be more "efficient". The referee should not be able to play the game.