Keep that dim bulb going

My biggest disappointments in life seem to occur when I fail to ask the right questions; questions like, " are there any other fees associated with this free offer?" Or, basic questions like, " how does this work"? Or the favorite guy question to be left unanswered, "how do you get there"?

This concept seems to be true with most customer’s relationship with their electric utility. In fact we typically don’t ask any questions at all. We just call a phone number and tell the person on the other end of the line to " sign me up". We are offended if we are asked for a deposit of any kind. "How could they question my integrity"?

Rarely does anyone ask, "so what have been the typical electric bills for this house I am moving into"? Or, "where does my electricity come from"? Or, what is the name of your company and what are its goals"?
In fact, as a nation, electricity consumers have gotten so lazy about electric service that the call center employees at your local electric company may be thrown into chaos if you start asking those questions. Mine certainly did. Can you imagine buying a car and not asking about who makes it? Would you ever consider getting a loan no matter how small with out expecting to pay some money down, a percent of the purchase price, like a deposit? Today electricity is considered by many to be an entitlement not a commodity. It’s in the Constitution; life, liberty and electricity. Not only is electricity a commodity that is bought sold and traded, it is a very expensive commodity to make and deliver.

So, lets look at the big picture first. Why should you keep reading? Because, knowledge is power when it comes to your electric bill. And, if Al Gore is correct, this knowledge may save the world. If he’s not you still get to keep the cash you save.

How do we get electricity, where does it come from and why should any of this matter to me? Well, just like there are FORD people and there are CHEVY people, the source of your power makes a difference. The lights stay on in your house, not simply because you resentfully pay your bill each month. Your toast gets toasted and your beer gets chilled by a remarkable system of interconnected companies, facilities, equipment and people that must all be working with a common vision.

Tracing the system backwards from that dim bulb in your closet takes some work and the details are....frankly... boring. Yet, when that bulb goes out you demand answers. You scream for heads to roll. Fists are raised in protest and cries echo in utility industry halls for the culprits to be thrown out in the street. If you don’t believe me do a quick review of the headlines in the northeast during rolling black outs or find some headlines from California several years ago.

Power gets to your home, apartment or condo from wires connected in your house to a breaker panel. The size of your house and the size and efficiency of the equipment in your house can require larger or smaller breaker panels but, from that breaker panel some wires connect your house to a meter. It might be the landlord’s meter in an apartment complex and it might be on a pole or on an outside wall, or on a pedestal , but somewhere there is a meter that records the amount of electricity that your house uses. These meters are generally simple mechanical devices. Many customers look at their meter with suspicion thinking that it’s the meter that makes the bill. Actually you make your bill, or at least all of the gadgets in your building make the bill. The meter is a simple mechanical or solid-state device. It does not speed up when it is failing. Just like your car does not speed up when it is having mechanical or electrical problems. Meter reading technology is evolving. The muddy notebook with the torn pages and dog tooth marks imbedded in the cover has generally been replaced by a handheld computer with dog tooth marks embedded on the casing. These high tech devices often prompt the meter reader with directions and information on the next meter to be read on the route. Some have radio transmitters that communicate with your meter, and only your meter, to get the readings from a distance. Some utilities even have the capability to communicate with your meter and get meter readings over the power lines. The device doesn’t matter, the theory is the same. The meter dial shows one number at the beginning of the month and then shows a higher number at the end of the month, unless you have net-metering, are a criminal or flipped the main breaker switch to "OFF". I’ll get to net-metering one of these days. The other two options will have to be covered by someone else.

Now, here comes the point of all of this. There is no real incentive for utility companies to make up numbers or bill you for more electricity than you have really used. There are so many checks and balances and so much regulatory oversight that any shenanigans with your meter will always come to light (pun intended) before too long. Does that mean you can relax and pay your bill? Heck no! Your electric company bills thousands, maybe billions of homes. Despite the checks and balances, mistakes; honest mistakes from failed equipment to corrupted data files do happen. If your utility fails to bill you for the juice you actually used its not free. Remember the last Blog. "Anything free, isn’t". Someone is paying for it. You used it, so it was generated and transmitted and distributed. If you don’t pay for it, everyone pays for it through higher rates.

Electricity comes to your meter from a company called a distribution company. It could be a Municipal company, an Investor owned private company, a public power district or a member owned cooperative. The business is the same. They sell you electricity and your payment to them covers their cost to buy the electricity, cover operating expenses, salaries, repairs and the loans that were needed to build the distribution system to begin with. Most distribution companies do not make their own electricity, though some do. There are even some Municipal Utilities that handle distribution and generation, but most distribution companies buy electricity from a whole sale power supplier or generator or generation company or a generation and transmission company.

Generation companies, we’ll call them G&T’s make power and sell it to distribution companies. Federal deregulation lets any one play the "generation" game by providing "open access" to transmission systems for a price. A few states are toying with the idea of "open access" or de-regulation for distribution companies, but once the stool got kicked out from under the California attempt at deregulation, proponents rhetoric definitely softened. Transmission "open access" has been viewed as a good thing by most consumer groups with few exceptions. The challenge for the G& T’s is to figure out how much electricity to make and when to make it. They use complicated formulas, past experience and a fair amount of prayer to make wholesale power. They can’t store it if they make too much and they loose friends and business if they don’t make enough. Remember those headlines.

So that is a very simple explanation of a system that I think is amazing. Next time, I’ll get into how electricity is made or generated. We’ll talk about the tried and true as well as the alternatives. Next time you’ll find out the source of the rallying cry, " Ban mining, let the bastards freeze in the dark". See you next week.