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Comment by hinkley | Hacker News Reader

I think you’re missing a different piece of the puzzle here which is that if I pay $10 for the first gallon of water and next to nothing for the next 500, I have an incentive to use more water and not less. I’ve paid for it anyway.

When you’re trying to solve public policy problems especially where conservation is concerned the notion of math gets complicated very quickly.

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Additionally, the worst strains on the grid are really measured by the peak loads, so if you change billing a way that makes the peak energy less expensive, and therefore disincentivize people to (a) reduce usage at peak times or (b) install solar panels/batteries to mitigate their peak usage, then it actually might make the grid more unreliable.

Water is different in that we really only have usage concerns about water, AFAIK there is never any issue with the water pressure drops at peak times (perhaps thanks to water towers). With electricity the concerns are mostly about the peak usage, and not so much the overall usage.

Yes, that's what you see in the commercial side, where demand charges based on your highest peak usage in a month are common. However, they are un-intuitive and easy to generate big bills for small amounts of power used, so I agree with the general idea that they're not a good idea for residential users.

You could institute something like time-of-day-based fees based on average demand for residential users without having the large unexpected bill problem.

I’m told that Industry gets charged not by how much current they draw but by how much it distorts the grid power waveforms. In fact there are experimental designs out there for power correction facilities that delay the waveforms by for instance 90% of a wavelength (so everything lines up again) and convert the delta to DC to store in batteries. The battery power can be used for their own purposes or to reinject in low voltage situations.

I was watching this one video where they were talking about how they dropped their electric bill by changing how whatever machine they were demonstrating started up. Instead of off to full on they set it to ramp up slow enough to not push them into the higher peak pricing bracket. Electricity usage was the same overall but the bill was less.

They are billed for demand, usage and power factor. They use capacitors to help with power factor.

Perhaps, but if we want to dis-incentivize usage as a political policy, we can just increase the usage charge above from "next to nothing". For power, generation costs in California run from $150/MWh to -$150/MWh: https://www.caiso.com/TodaysOutlook/Pages/prices.aspx

$0.15/kWh seems like enough to begin the dis-incentivizing of usage, and that can certainly be pushed up more.

So we’re going to reduce the hourly rate and charge a base fee, and then increase the hourly rate back to the old value?

So you’re asking for a regressive rate in electricity.

If your solution to a public policy issue is “why don’t we just” then you don’t understand the issue. I’m just pointing out externalities that you guys aren’t thinking about when shooting the shit about upcharging low income families and allowing the rich to get richer. You are contributing to the problems we complain about.

Certainly such a model is regressive, but it is in line with the actual costs of service. In my opinion, it's better to have a pricing model that reflects the actual costs of service, then an explicit subsidy to repair the regressivity issue, such as the Consumers Affordable Resource for Energy (CARE) Program in California.

Using usage as a proxy for value-received from the grid worked fine when there was a monopoly provider, but with distributed solar being a thing, we have to move off of the model, or we end up with an even more regressive system. As I noted before, we use these systems for water, gas, and other utilities, so we have methods for addressing their natural regressiveness.

Alternately, if you feel (and this is reasonable) that power should be a ubiquitous service provided to everyone, take over the grid, pay for maintenance and development of the grid with tax dollars, and bill only for generation/usage after a reasonable base allocation.

Theoretically, you could add a third type of charge related to the externalities associated with your consumption. I'm not sure exactly how the accounting would work, but maybe an escalating fee based on the amount you consume. My utility actually does this with electricity, where the rate goes up after your first 1000 kWh. Obviously this could get more elaborate.

This is effectively similar to the "energy price ceiling" that the Netherlands have introduced for this year: https://www.government.nl/topics/energy-crisis/cabinet-plans...

Note: the most recent English document still describes this as "planned", but it has been approved and has gone into effect with the start of 2023.

The difference is though that the state subsidies the "cheaper" rate. When a customer has consumed the subsidized amount of electricity or gas, they pay the full market price.

That’s a fancy way to say carbon tax, which I agree with but also recognize has been turned into a political landmine.

Also I thought PG&E still had the reverse situation, of people voluntarily paying more for green power.

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