Yes. Services like gas and water are natural monopolies - it doesn’t make sense to roll out two or three separate lots of distribution pipes, so you always just have one service available to you. The best option is to have them as government owned services.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area. The company you pay in this scenario literally offers you zero value. They simply exist to extract money from you.
Alternatively, these services could be provided to you at a lower cost as part of your annual tax bill under a collaborative cooperative.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area.
That’s not how it works.
The price you pay has 2 main components: a fixed component for network costs. This part is always the same and only depends on the type of hookup you have (e.g. an industrial power connection would cost more than a residential one). It goes to the owner of the physical power network (this depends on where you live) who uses it for things like maintenance (and of course a little profit). The network operator does not provide power themselves.
The variable component is based on your usage and goes to the power company. The power companies provide the actual power to the national grid. While it may be true that the power coming out of my outlets wasn’t produced by the company I’m contracted with, that doesn’t really matter. Electricity is electricity. What matters is that each power company has to provide the amount of energy used by their customers to the national grid. Say company A has 100 customers that on average used 1 kilowatt-hour each, and company B has 50 customers that used the same amount on average. Then company A has to provide 100 kilowatt-hours to the national grid and company B has to provide 50 kilowatt-hours.
How they provide that power is up to them, and usually varies. The larger energy companies have their own power plants, wind and solar farms. Smaller companies may buy energy in bulk from the larger ones and try to sell it at a profit to consumers. Energy companies may also buy or sell to/from other countries, depending on capacity and demand.
Point is that they don’t just forward you the bill from a local company, they actually have to provide the power and outside of a few small ‘virtual’ energy companies they do produce that power.
Quite simple actually. The supplier knows how much water it puts in the pipes, and consumers have meters that measure how much water they take out of the pipes.
Water is water… It doesn’t matter if you’re not getting the exact same water molecules put in by your supplier.
Think of it like this… You have a jug of water. The supplier puts in a glass of water, and you (the consumer) take out one glass of water. The quantity of water in the jug stays the same, but you pay the supplier for how much water you took out.
Tap water is not just water. Water has a bunch of other things in it besides water. The main reason I can think to choose a different water supplier than the cheapest is the water quality. If the cheap supplier is gonna crap up all the water for everyone else, what’s anyone incentive not to go with the cheap supplier? Doesn’t that pretty quickly devolve into a monopoly?
With electricity, it is just electricity and people have opinions about how that electricity is generated. But even there, it’s usually not a good thing. It leads to high pressure, scammy sales tactics that result in higher bills for no benefit.
If you’re all using the same wires, you’re subjected to those problems even if you don’t contract with them. So multiple suppliers doesn’t fix the issue. It just introduces more suppliers who can have those problems.
That would destroy the entire grid and a lot of equipment. It’s why texas had rolling blackouts a few winters ago, it’s a fine balance between supply and demand to maintain stable voltage and frequency. Failure to do so can result in a LOT of damage. If you don’t have enough supply, you have to reduce demand.
Can be solved by putting a certain quality requirement for putting water into the pipes. Suppliers can compete on price.
It’s not realistic to have multiple pipe systems covering the same area. Digging pipes is very expensive. Digging multiple networks of pipes is insane. This solution is the best compromise to have multiple suppliers serve in the same area.
If the only difference is price, how does that not just devolve into a monopoly or shitty sales tactics to try to trick people into paying more for the same product?
Yes. Services like gas and water are natural monopolies - it doesn’t make sense to roll out two or three separate lots of distribution pipes, so you always just have one service available to you. The best option is to have them as government owned services.
And yet, I can choose from dozens of different energy companies for electricity and gas.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area. The company you pay in this scenario literally offers you zero value. They simply exist to extract money from you.
Alternatively, these services could be provided to you at a lower cost as part of your annual tax bill under a collaborative cooperative.
That’s not how it works.
The price you pay has 2 main components: a fixed component for network costs. This part is always the same and only depends on the type of hookup you have (e.g. an industrial power connection would cost more than a residential one). It goes to the owner of the physical power network (this depends on where you live) who uses it for things like maintenance (and of course a little profit). The network operator does not provide power themselves.
The variable component is based on your usage and goes to the power company. The power companies provide the actual power to the national grid. While it may be true that the power coming out of my outlets wasn’t produced by the company I’m contracted with, that doesn’t really matter. Electricity is electricity. What matters is that each power company has to provide the amount of energy used by their customers to the national grid. Say company A has 100 customers that on average used 1 kilowatt-hour each, and company B has 50 customers that used the same amount on average. Then company A has to provide 100 kilowatt-hours to the national grid and company B has to provide 50 kilowatt-hours.
How they provide that power is up to them, and usually varies. The larger energy companies have their own power plants, wind and solar farms. Smaller companies may buy energy in bulk from the larger ones and try to sell it at a profit to consumers. Energy companies may also buy or sell to/from other countries, depending on capacity and demand.
Point is that they don’t just forward you the bill from a local company, they actually have to provide the power and outside of a few small ‘virtual’ energy companies they do produce that power.
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How do you send different supplier’s water down the same pipes while making sure customers get the supplier they’re paying for’s water?
Quite simple actually. The supplier knows how much water it puts in the pipes, and consumers have meters that measure how much water they take out of the pipes.
Water is water… It doesn’t matter if you’re not getting the exact same water molecules put in by your supplier.
Think of it like this… You have a jug of water. The supplier puts in a glass of water, and you (the consumer) take out one glass of water. The quantity of water in the jug stays the same, but you pay the supplier for how much water you took out.
It works the same way with electricity.
Tap water is not just water. Water has a bunch of other things in it besides water. The main reason I can think to choose a different water supplier than the cheapest is the water quality. If the cheap supplier is gonna crap up all the water for everyone else, what’s anyone incentive not to go with the cheap supplier? Doesn’t that pretty quickly devolve into a monopoly?
With electricity, it is just electricity and people have opinions about how that electricity is generated. But even there, it’s usually not a good thing. It leads to high pressure, scammy sales tactics that result in higher bills for no benefit.
Hypothetically, what if my electricity, in my shitty profit seeking corporation, cycles inconsistently?
What if my equipment at my rinky-dink substation fluctuates between something absurd like 40hz to 70hz.
This would be extremely dirty electricity\ electromagnetic pollution.
If you’re all using the same wires, you’re subjected to those problems even if you don’t contract with them. So multiple suppliers doesn’t fix the issue. It just introduces more suppliers who can have those problems.
Exactly! A shitty race to the bottom even for electricity is my point.
Never under estimate capitalism’s ability to create a shittier alternative, is all I’m saying.
That would destroy the entire grid and a lot of equipment. It’s why texas had rolling blackouts a few winters ago, it’s a fine balance between supply and demand to maintain stable voltage and frequency. Failure to do so can result in a LOT of damage. If you don’t have enough supply, you have to reduce demand.
Why would this electric company care? Would the company not sell the customers a solution?
Can be solved by putting a certain quality requirement for putting water into the pipes. Suppliers can compete on price.
It’s not realistic to have multiple pipe systems covering the same area. Digging pipes is very expensive. Digging multiple networks of pipes is insane. This solution is the best compromise to have multiple suppliers serve in the same area.
If the only difference is price, how does that not just devolve into a monopoly or shitty sales tactics to try to trick people into paying more for the same product?
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